{"id":8288,"date":"2022-05-11T15:58:00","date_gmt":"2022-05-11T14:58:00","guid":{"rendered":"https:\/\/www.2020financial.co.uk\/?p=8288"},"modified":"2023-08-03T13:40:01","modified_gmt":"2023-08-03T12:40:01","slug":"are-you-saving-enough-for-retirement","status":"publish","type":"post","link":"https:\/\/www.2020financial.co.uk\/are-you-saving-enough-for-retirement\/","title":{"rendered":"Are you saving enough for retirement?"},"content":{"rendered":"\n

Worryingly, research<\/a> has shown that 90% of all defined contribution pension savers aren\u2019t saving enough to enjoy a comfortable retirement. And since a large majority of us Brits have defined contribution pensions, this suggests that chances are that you aren\u2019t saving enough for retirement.<\/p>\n\n\n\n

Something that you may not have considered is that this actually gets worse the more you earn. Research by the Centre for Ageing Better shows that over three-quarters of the highest earners won\u2019t have saved enough to maintain their pre-retirement standard of living<\/strong>. <\/p>\n\n\n\n

The richer you are, the harder it is to sustain in your golden years. So If you\u2019re a high earner, you probably need to be saving more than you think for retirement.<\/p>\n\n\n\n

Save for retirement or enjoy life now?<\/h2>\n\n\n\n

Perhaps you\u2019re avoiding retirement savings because you want to spend your hard-earned money now. You wouldn\u2019t be alone: it\u2019s one of the biggest reasons that we see getting in the way of people building a big enough pension pot.<\/p>\n\n\n\n

In a world where you can place an order and have it sat on your doorstep an hour later, with constant comparison to strangers on the internet and upgrades available at your fingertips, it\u2019s easy to get sucked into the \u2018I need that NOW\u2019 mentality. <\/p>\n\n\n\n

Plus, as we earn more we naturally want to spend more. This concept, known as lifestyle creep, is when an increased income leads to increased spending and lower savings. It manifests in a heightened taste for the finer things in life, resulting in a severely depleted savings pot.<\/p>\n\n\n\n

RELATED: IS LIFESTYLE CREEP COSTING YOU YOUR RETIREMENT?<\/a><\/p>\n\n\n\n

The problem is that this short-term gain leads to a long-term loss. While it is totally subjective when it comes to what constitutes a \u2018comfortable\u2019 retirement, the fact remains that if you can\u2019t have the lifestyle that you\u2019re used to, you\u2019re going to have a harsh shock in later life. Saving a sufficient amount now means that you can enjoy your financial future free from stress and pressure while living a life that feels good to you.<\/p>\n\n\n\n

\"retirement<\/figure>\n\n\n\n

Is saving for retirement worth it?<\/h2>\n\n\n\n

Saving for retirement is essential if you want to enjoy your later years free from financial stress. For higher earners, the UK state pension is insufficient to support a comfortable retirement. As one of the least generous in the developed world, it is estimated to provide around 58% of average pre-retirement earnings<\/a>. <\/p>\n\n\n\n

However, the current state pension of \u00a310,600 (2023) is a drop in the ocean for most middle to high-income households and would represent a significant fall in living standards.<\/p>\n\n\n\n

No one wants to survive on the bare minimum; Afterall, your retirement is your time to really enjoy the things in life that matter to you. And while it may feel incredibly appealing to cut corners on your savings now so that you can enjoy that last-minute holiday or that flashy new car, those decisions are eating further and further into your comfortable retirement.<\/p>\n\n\n\n

Even if you plan on working throughout your retirement, it\u2019s still crucial to save. You cannot predict the future. Countless things could get in the way of you working – from ill health to job loss – and you don\u2019t want to find yourself stuck with a dwindling pension pot and no way of topping it up. <\/p>\n\n\n\n

Pensions are also the most tax-efficient vehicle in the UK for your money. Their benefits are enormous:<\/p>\n\n\n\n