Susannah Cann, 49, from Brenchley, Kent, doesn’t think she’ll ever be able to retire because it’s currently too difficult to save money.
Susannah, a self-employed recruiter and mother of four children ranging in age from 16 to 26, explained that after covering rent and everyday living costs – which have significantly increased recently – she has very little money left to save for retirement. As a result, she hasn’t been able to contribute to a pension.
Being self-employed makes it hard for her to save for retirement. Unlike traditional jobs, she doesn’t have automatic enrollment in a retirement plan or employer contributions, which puts her at a disadvantage. She’s concerned she won’t have enough money to retire comfortably and expects to need to work long after she reaches the typical retirement age to make ends meet.
Susie’s situation is common. Almost half of adults who are still working – about 18 million people – aren’t currently saving for retirement, even though they have a job.
A new report from the Pensions Commission estimates that 15 million people aren’t saving enough for retirement and could experience a significant drop in their income when they stop working.
Many people risk facing a poor retirement, particularly considering how much money is needed to live comfortably. Recent estimates from Pensions UK show a single person needs £32,700 annually for a moderate retirement lifestyle, while a couple needs £45,400. This amount assumes they receive the full state pension of £12,548 per year, with the rest coming from private pensions.
Having a comfortable, but not extravagant, retirement gives you more financial freedom than just covering the bare essentials. For instance, a couple might spend around £106 per week on food, £66 on occasional meals out, own a used car, take a two-week vacation in Europe, and enjoy a short break within the UK.
According to Craig Rickman, a personal finance expert at interactive investor, the Retirement Living Standards simply provide a general idea of what it takes to achieve a basic, decent, or comfortable retirement. How much money people actually need will vary based on their individual lifestyles and what they want to achieve in retirement.
While Pension UK’s yearly estimates can be a good place to begin, it’s most important to consider the lifestyle you want in retirement. Figure out how much you’ll need to save to achieve it, and start planning as soon as possible.
It’s unlikely most people have saved as much for retirement as Pensions UK suggests. Recent data from the Office for National Statistics shows that the typical pension savings for those aged 25-34 are around £18,800. This increases to £39,500 for ages 35-44, £80,000 for 45-54, and £137,800 for those aged 55-64.
The following table gives a general idea of how much you should save each month, depending on your age, to maintain a comfortable lifestyle when you retire around age 67.
Retirement ready reckoner: How much you may need to save for a moderate retirement
Moderate lifestyle– single person
Existing pension savings
Total monthly contribution needed
(incl. employer payment)
Age 20£0
£230
Age 30£19,000
£340
Age 40£39,500
£560
Age 50£80,000
£1,015
Don’t bank on the state pension
As someone who loves watching films and imagining the future, I’ve been reading about how the state pension age is changing. It’s going up from 66 to 67 between 2026 and 2028, and then again to 68 sometime between 2044 and 2046. What’s interesting is that the government is currently looking at whether to speed up these changes, so things could happen even sooner than planned. It makes you think about how long people will be working for in the years to come!
Rathbones estimates that changes to the state pension age could significantly affect younger workers. A 25-year-old today might receive around two years less in state pension payments – roughly £69,900 – if the pension age increases as predicted, compared to it staying at 66. Those currently 45 could lose approximately £42,700.
These estimates use the current full state pension amount and project it will increase each year, following the ‘triple lock’ rule. The triple lock guarantees the pension rises by the highest of three things: inflation, average wage growth, or 2.5%.
According to Ed Wood, a financial planning director at Rathbones, a major concern for younger people is that they’ll probably receive a smaller state pension than current retirees. This means they’ll need to save significantly more on their own to ensure a comfortable retirement.
There are ways to boost your retirement savings if you’re worried about future finances.
Ways to boost your retirement savings
Feeling worried about having enough money for retirement is common, but there are many steps you can take to improve your savings.
1) Find out if your employer will match your contributions
If you’re part of our company pension plan – and most employees are automatically signed up when they begin working – check with your employer to see if they’ll match your contributions.
According to Sarah Coles, a personal finance expert at AJ Bell, many employers will contribute more to your pension if you increase your own contributions. Essentially, if you save a little extra each month, your employer might match that amount, giving you free money towards your retirement. For example, saving an extra £100 a month for 20 years could boost your pension by almost £43,000, and over 30 years, that figure could reach nearly £88,000.
2) Are you on track?
Planning for retirement means considering the lifestyle you want and estimating how much money you’ll need. Helen Morrissey from Hargreaves Lansdown suggests using online pension calculators to see if you’re on track, and to create a plan if you need to catch up.
3) Find out where your retirement savings are invested
If you have a workplace pension through your job, your contributions typically go into a standard investment fund automatically. However, this default fund might not be the most suitable choice for your individual needs.
Mike Ambery from Standard Life suggests it’s a good idea to review how your pension is invested to make sure it still aligns with your retirement goals, when you plan to retire, and your tolerance for risk.
4) Track down lot pensions and consider combining your pots
Don’t forget to see if you have any forgotten pensions – they could provide extra income when you retire.
Coles highlighted that around 3.3 million pension pots are currently lost in the UK, adding up to over £31 billion. It’s common to lose track of pensions when changing jobs, but many pension companies offer free services to help you find them. Even if you know where your old pensions are, it’s worth checking how they’re performing and considering whether to combine them for easier management.
As a movie critic, I often talk about narratives, but let’s talk about your life story for a minute. I’ve been looking into pension consolidation, and it’s surprisingly empowering. It’s not just about simplifying things – fewer accounts to remember, less admin – it’s about taking control. Consolidating really allows you to see the bigger picture, helping you make smarter choices about contributions, investments, and even cutting down on fees. It’s like a director’s cut of your financial future – clearer, more focused, and ultimately, more rewarding.
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2026-06-09 12:09