Double your pension pot or face destitution, says MetLife
Many people prioritise paying off their mortgage or financing their children’s future ahead of funding their retirement, but this could come back to haunt them.
UK investors approaching retirement have less than half of the retirement savings they will need to guarantee a minimum standard of income when they stop work, according to new research from MetLife.
The average 50-year-old has £54,300 saved in their pension fund; however, in order to meet pensioners’ minimum annual income standards of £14,400 including state pension, this figure would need to be around £122,800 by the time they retire.
Moreover, 26 per cent of those polled say they have less than £20,000 saved.
It appears that saving for retirement is being squeezed by other priorities – the average 50-year-old with a mortgage outstanding is five times more likely to prioritise paying it off, while those with children are 20 per cent more likely to focus on their children’s financial well-being.
The research is particularly concerning given that most people of this age expect to retire early; according to MetLife, the average 50 year old plans to stop work at 61-and-a-half years old while homeowners are hoping to pay off their mortgage at 58 and-a-half years old.
Commenting on the findings, Dominic Grinstead (pictured)
, managing director of MetLife UK, said: "Around 868,000 people will turn 50 this year – 32,000 more than last year. "
"Someone in the UK turns 50 every 40 seconds but they are far less financially secure than their predecessors. The uncertain generation – those born between 1961 and 1981 – has complex financial needs but are facing unprecedented pressures."
"They accept that they will have to retire later than anticipated, but are still uncertain about exactly how young they will be able to do so."
"Currently the average 50 year old is a long way off the pension required to be financially comfortable after work. As a result, retiring before 60 is highly unlikely for most."
"We understand that those in the uncertain generation have to fund their own, longer retirement as well as provide for their children’s education and future – all at a time of great financial uncertainty and economic volatility. This is why they need to seek financial advice."
MetLife has launched the U-Gen campaign as part of its focus on delivering more certainty and control in financial planning.