How Much Should I Save for Retirement in the U.K.?

According to Retirement Expert UK, around half of all U.K. adults between 20 and 60 years of age have not saved for a pension.

Rely on the State

A single person who relies on the basic state pension alone will receive 97 pounds and 65 pence (about $153) a week at 2010--11 figures. This will likely be a low amount to cover all bills and living expenses. Government Minister Steve Webb admitted that the state pension was "not enough to live on" as of 2010.

Save Regularly

To enjoy a higher standard of living, employees can build up a pension fund by paying into an occupational pension or, alternatively, by putting money into a personal pension plan. The investment performance of the plan will determine the final pension pot.

Bottom Line

According to Retirement Expert UK, it's a good idea for a person to save 15 percent or more of his annual salary for retirement from the age of 25. If a 40-year old starts saving for retirement, then he should allocate between 17 percent and 24 percent of his annual salary.

References

• Directgov: State Pensions---An Introduction
• "The Independent": State Pension Is Not Enough to Live on, Minister Admits
• Retirement Expert: Retirement Countdown: How Much to Save