Retirement plan: What lifestyle do you want and can you afford it - find out below Many top earners face a retirement shock as they are only saving enough for a middling lifestyle lacking luxuries or aspirational trips in old age, new research shows. Nearly 70 per cent of households bringing in an annual income of around £77,000 or more are on track for at least a moderate retirement. Just under 40 per cent are saving sufficient sums to hit a higher bar and fund a comfortable life.
A single person needs £25,000 a year and a couple £36,480 a year to achieve a moderate standard of living once they stop work, according to the study by Hargreaves Lansdown. That rises to £38,662 a year and £58,480 respectively if you are aiming for a more affluent retirement, it calculates. In the population overall, some 38 per cent of households are on course for a moderate retirement income and 18 per cent for a comfortable one.
'Well over two-thirds of the highest earning households are on track for a moderate retirement income,' says Helen Morrissey, head of retirement analysis at Hargreaves Lansdown. 'On the face of it this looks good but dig a bit deeper and there's a nasty shock in store.' She says the reality is higher earners will be used to spending much more than they will be able to on the moderate level of income.
'It means there are some tough decisions in store for many unless they can start plugging the gaps in their Sipps [Self-Invested Personal Pensions] and workplace pensions.' The Hargreaves figures for the income levels needed to achieve these lifestyles..
. Tanya Jefferies.
