The average UK pension saver is contributing just a quarter of the amount required to achieve a comfortable retirement, according to the latest data from HMRC.
According to analysis of new data from HMRC by financial advice firm Continuum, the average pension saver is contributing £7,222 less every year than would be required for a comfortable lifestyle in retirement.
According to the Pensions and Lifetime Savings Association (PLSA)’s Retirement Living Standards, to achieve a comfortable retirement, savers need a minimum pot size of £540,000, needing to contribute on average 20% of earnings in order to achieve this.
The mean salary for UK full-time workers in the 2024/25 tax year was £48,512, according to the Office for National Statistics. However, the average contribution made by savers into private pensions the same year was just £2,480, roughly equivalent to 5% of earnings, according to data from HMRC.
Craig Parkinson, Independent Financial Adviser at Continuum, said: “Today is Pension Awareness Day and provides the perfect opportunity for financial advisers to reach out to their local communities and potential clients to ask them when they last checked-in on their retirement savings.
“Pensions, and the tax reliefs surrounding them, can seem extremely complex and unapproachable for many savers but a good financial adviser can demonstrate how they can add value in this area, demystify the jargon and help dispel the myth that financial advice is only for the extremely wealth.
“A little time reviewing old employment and pension records could give someone a much clearer picture of their retirement position and potentially reunite them with money they had forgotten about.”
Previous research from Continuum has found that loess than half of pension savers are confident that they will be able to have financial freedom in retirement.
Savers between the age of 45 and 54 were the least confident, with 60% concerned about their finances in retirement.
Those with one or more children under the age of 18 were also considerably less confident about their retirement savings, with 61% of those with children between the ages of 5 and 11 sharing concerns about whether their retirement savings would be sufficient to meet their needs.
Editors Notes – About Continuum
Continuum, headquartered in Plymouth, was established in 2014 as a National IFA brand to offer a modern, new financial advice experience.
The business focuses on creating a three-way partnership between Continuum, the adviser and the client, in an environment where each party can only succeed and grow if the other parties also succeed and grow.
By educating customers through an award-winning financial education programme and offering our clients a loyalty programme, Continuum develops long-term relationships strongly endorsed though market leading Net Promoter Scores – most recent customer survey delivered a score of +90.
An in-house discretionary model portfolio service, My Continuum Wealth, was initiated in July 2021 to offer an exclusive MPS (Model Portfolio Service) to Continuum advisers.
Continuum now holds assets under influence in excess of £3.12 billion.
In December 2020 Continuum was awarded ESG kitemark (ESGmark) accreditation in recognition of its business approach of Environmental, Social Responsibility and Governance matters.
Continuum is a trading name of Continuum (Financial Services) LLP which is authorised and regulated by the Financial Conduct Authority. Continuum (Financial Services) LLP is a Limited Liability Partnership
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Katherine Mitchell 07917 855881 kmitchell@brandonconsultingservices.co.uk
