Calling all Generation X’ers! It’s time to take a look at your pension savings. Are you saving enough? How big a pension pot do you need for a comfortable retirement?
A new study from Blackwater financial management reveals that most Generation X’ers aren’t saving enough. Here, I take a look at how much pension you need to enjoy a comfortable retirement and what to do to catch up if you’re not saving enough.
How much pension do you need to save?
So, exactly how much do you need to save in your pension if you’re a Generation X’er? It’s an eye-watering £330,330 according to Blackwater Financial Management. That size of pot would give you a pension of around £23,595 per year, assuming you wait until you’re 68 years old to draw your pension.
But most of us simply aren’t saving enough. You need to save around £7,341 per year between the ages of 23 and 68 to build up that size of pension pot.
It’s no wonder that, according to Blackwater Financial Management, 65% of Britons worry about financial stability in retirement.
Which areas in the UK are saving the most?
Black Financial Management also investigated which UK regions are saving the most into their pensions.
Edinburgh is the best city for investors. But even in Edinburgh, only 18.3% of residents have at least £330,330 saved in their pensions.
Liverpool was found to be the worst city in the UK for retirement savings, with 32.5% of residents having saved nothing towards their retirement.
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How can you catch up on pension savings?
So, what should you do if you’re not saving enough for your retirement? Here are some top tips:
- Don’t give up – if you’re currently miles away from saving enough in your pension, then you’re not alone. Many people aren’t saving enough and even a smaller pension pot is better than nothing.
- Start saving now – there’s a saying that the best time to start investing was ten years ago. And the second-best time is now! Start saving now and you will soon see your pension pot begin to grow.
- Prioritise pension saving – if you concentrate on saving for your pension rather than saving for the short term, this will help you in the long term. However, do make sure that you have enough saved for emergencies so you don’t have to dip into debt.
- Make a budget and stick to it – the best way to budget in order to save is knowing how much you can spend weekly. If you need help with this, then see a financial advisor who can give you additional tips and tools to help you stay on track.
- Talk to your partner about how to make savings – be open with your partner about your finances. Talk about how much you should both be saving for retirement. It’s always helpful to chat openly about finances to avoid any awkward discussions later down the line.
- Pay off your mortgage – if you manage to pay off your mortgage before you retire, then it’s one less bill to have to think about. It won’t directly impact your pension savings but it will increase your disposable income in retirement.
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About the author
A Chartered Accountant, Mum and personal finance geek, Alice writes on topics including budgeting, saving and investing.
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