Less than half of high earners are on track for a comfortable retirement income, new research from Hargreaves Lansdown has revealed.
According to the recent HL Savings and Resilience Barometer, only 39% of higher-earning households are on track for a comfortable retirement income, which the firm has pegged at £38,662 per year for a single person and £58,480 for a couple. This compares to 18% of households overall.
Meanwhile, 69% of higher earners are on track for a modern retirement income, which is set at £25,000 per year for a single person and £36,480 for a couple.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warns that higher earners are in for a “nasty shock.”
“Well over two thirds of the highest earning households are on track for a moderate retirement income. On the face of it this looks good but dig a bit deeper and there’s a nasty shock in store.
“Our modelling puts the cost of a comfortable retirement income at £38,662 per year for a single person and £58,480 for a couple. This is probably far closer to meeting the lifestyle expectations of higher earners, but with only 39% of this group on track, it means there are some tough decisions in store for many unless they can start plugging the gaps in their SIPPs and workplace pensions.”
Hargreaves Lansdown said pension savers should take the opportunity to increase contributions every time they get a new job or a pay rise and consider contributing a portion of any bonuses received into their pension. Employees should also check whether their employer is willing to contribute more to their pension.
Additionally, savers should plan ahead and think about when and where they would like to retire and ensure they have tracked down any ‘lost pots’ which could potentially add thousands of pounds to their overall pension.
PLSA and HL retirement figures
