This is vital research and a valuable indicator for individual contributors and households looking to secure a comfortable future.

However, several factors can complicate this picture.

On the one hand, according to studies by Tisa, the tax-free cash allowance is almost always withdrawn and often reserved for large purchases, which means that some households do not save enough to reach a comfortable level of retirement despite a contribution they deem sufficient. funds during their working life.

Save enough?

Although the introduction of Auto Enrollment (AE) in 2012 led to a record number of employees contributing to their workplace program, challenges remain.

It is essential that they must now save enough, or they risk creating an insufficient pension fund.

And for these to be sufficient, we need to understand the additional financial pressures retirees will almost certainly face during, during, and toward the end of their retirement.

The new who? research concludes that couples will generally need a net income of £ 26,000 and singles £ 19,000 per year for a comfortable retirement.

However, when additional factors such as raising a family, caring for elderly relatives, constant increases in life expectancy and protection against inflation are taken into account, annuity income can be cut in half. .

It is important to note that the value of the fund required for a household to have a comfortable retirement from an annuity is £ 265,420. This is based on the purchase of a level annuity with a 50 percent spousal guarantee.

On the first death, the surviving spouse would experience a significant drop in income due to the household’s loss of the basic state pension and 50 percent of the annuity.

If the annuity were to provide indexation and a pension for 100 spouses, the required fund value would have to be around £ 400,000.

Tisa’s modeling for a median household income pathway based * on EI from age 18 and contributions based on full earnings indicates that a contribution level of 12 percent would globally achieve this goal.

However, life courses can vary wildly and it is therefore essential that retirees are equipped to understand the impact that life events could have on retirement savings and, therefore, on their retirement outcomes.

Tisa’s modeling is based on an optimistic baseline, as it assumes that the mid-2020 proposals have already been fully implemented, although we currently do not have a specific date in legislation.

It also assumes that no tax free money is taken and is used to purchase an annuity. As mentioned above, tax-free cash is almost always taken and if not used for retirement purposes, contribution levels above 12 percent would be required.

Future challenges

Half (50%) of people who accessed their pension funds for the first time in 2019/2020 did not seek any advice or guidance.