Workers ‘need pension saving targets’

The majority of workers are unaware of how much they need to save for a comfortable retirement and need targets, a trade body has said.

More than 13 million people risked not saving enough for an adequate retirement, the Pensions and Lifetime Savings Association (PLSA) said.

Its research suggested that 78% of those surveyed did not know how to tell whether they were on track.

It said retirement income targets used in Australia could be copied in the UK.

The PLSA said consultation, running until January, would consider what exact income levels could be needed.

In its initial research, the general response among people aged between 55 and 64 years old suggested that a single person might need between £10,000 and £15,000 a year for a minimum standard of living in retirement, £15,000 to £25,000 for a modest standard and more than £25,000 for a comfortable standard.

“We all know we need to save for retirement but few of us know how much we might need to live on or whether we are on track to hit that target,” said Graham Vidler of the PLSA.

Lee Hollingworth, from pensions consultants Hymans Robertson, said: “As a nation we are still massively under-saving for retirement.

“What is required is for the government to commit to the schedule of increasing auto-enrolment contribution levels even further. For many to be able to retire on an adequate income, contributions in excess of 15% are needed.”

Rob Yuille, head of retirement policy at the Association of British Insurers, said: “Automatic enrolment has been extremely successful in pulling people into the pension system, but people do need to make decisions about the kind of retirement lifestyle they want and begin to make longer-term plans on how to achieve that.

“A clear and consistent set of targets would help people plan for retirement and we welcome the PLSA’s decision to consult widely on this issue.”