Three quarters of workers not on track for 'moderate' pension income, report suggests
A newly-published report suggests a moderate lifestyle in retirement costs £32,700 for one person and £45,400 for two.
By BBC News
A new pensions report suggests many workers are not on track for the income needed to fund a moderate lifestyle in retirement.
Three quarters of workers may not be on track for a moderate income in retirement, according to newly published pensions analysis.
The report suggests many people are likely to fall short of the income needed to cover a comfortable but not luxurious retirement lifestyle.
According to the BBC report, a moderate lifestyle in retirement is estimated to cost £32,700 a year for one person and £45,400 a year for a two-person household.
Those figures are based on the Retirement Living Standards, which are produced by the Pensions and Lifetime Savings Association and calculated by Loughborough University’s Centre for Research in Social Policy.
The standards are designed to show what different levels of retirement spending might look like, from minimum to moderate and comfortable.
A moderate retirement is not meant to represent wealth or luxury. It usually includes more flexibility for social activities, eating out, short breaks and replacing household items when needed.
Official analysis published by the Department for Work and Pensions says almost three in four people are projected to have pension income below the moderate Retirement Living Standard.
The same analysis found 13% of working-age people are projected to fall below the minimum retirement living standard, while 91% are projected to fall below the comfortable standard.
For workers in Cheshire, the figures are a reminder that pension planning is no longer something to leave until the final years before retirement.
Many people rely on workplace pensions, but minimum auto-enrolment contributions may not be enough on their own to deliver the lifestyle they expect later in life.
The current full new State Pension can provide a foundation, but it is unlikely to meet the moderate retirement figure by itself.
That means private pensions, workplace schemes, savings, investments, housing costs and retirement age all become part of the calculation.
The challenge is particularly difficult for people who started saving late, took career breaks, worked part-time, were self-employed or had periods out of the labour market.
Younger workers may have more time to build pension savings, but they are also dealing with rent, mortgages, childcare costs, student debt and higher everyday bills.
For people in their 40s and 50s, the priority is often to understand the gap between what they are currently saving and what they are likely to need.
A useful first step is checking workplace pension statements, looking at projected retirement income and confirming whether old pension pots from previous jobs have been traced.
Workers should also check their State Pension forecast through GOV.UK, especially if they have gaps in their National Insurance record.
Small increases in pension contributions can make a meaningful difference over time, particularly when employer contributions and tax relief are included.
However, pension decisions should be balanced against emergency savings, debt, mortgage costs and short-term household pressures.
The report does not mean every person must have exactly £32,700 or every couple must have £45,400.
Retirement needs vary widely depending on housing, health, family support, location, debts and lifestyle.
Someone who owns their home outright may need less income than someone still renting or paying a mortgage.
But the figures are useful because they give workers a benchmark against which to test whether current savings are likely to be enough.
For Cheshire households, the practical message is clear: check the numbers early, understand the likely gap and increase pension saving where affordable.
Anyone unsure about their retirement position should consider speaking to their pension provider, using free guidance from MoneyHelper, or taking regulated financial advice before making major decisions.