Retirees have £119,000 less than they hoped for in their pension savings, potentially impacting their retirement lifestyle, research from Standard Life has found.
The survey showed that retirees hoped to have £250,000 in their retirement pots, but had an average of £131,000, which could reduce their monthly income in retirement by £480.
Based on current annuity rates, a pot of £250,000 could lead to an income of £1,007 monthly, or £12,091 a year, assuming a retirement age of 66.
In contrast, a pension pot of £131,000 could result in a yearly income of £6,332 and £527 monthly, resulting in £5,759 a year less.
According to the Pensions and Lifetime Savings Association's (PLSA) Retirement Living Standards, a pension pot of £250,000, even though not insignificant, falls short of its ‘moderate’ standard of living.
The research also showed that retirees have regrets in preparing for retirement, with half (50 per cent) wishing that they had thought about their retirement at a younger age when they had more time.
In addition to this, 54 per cent of retirees wished they had saved more, while 53 per cent wished that they had started saving earlier.
A common regret was education around planning for retirement, with 51 per cent wishing they had more information on how to plan and prepare for retirement.
In addition, 42 per cent wished they sought advice or guidance and 37 per cent said they should have sought advice before accessing their pension savings.
Standard Life’s managing director for retail direct, Dean Butler, said: “Clearly there’s a big gap between what people hope to save, and what they actually do. This is unsurprising, particularly when looking at it during a cost-of-living crisis. However, the result can be a significantly reduced standard of living in retirement.
“Access to affordable personalised advice and guidance is crucial to closing the gap – as things stand, way too few people feel able to get advice and we can see that people then regret not doing so.
“Ultimately, contributing as much as possible, as early as possible is the key to a good retirement outcome, but it’s a huge challenge to know what to aim for and when to prioritise long-term saving over more immediate priorities."
