Do you know how much money you will need to retire?

More than three-quarters of people don't know how much money they will need when they are retired, it has emerged.

This worrying statistic emerged in a UK poll carried out for the Pensions and Lifetime Savings Association (PLSA) on attitudes towards saving for retirement.

The body, which helps pension professionals run better pension schemes, has now launched a consultation designed to help people define and meet their retirement goals.

It said that identifying how much is needed to save for retirement is a significant challenge for most people. Only 16% know how much they would need to achieve the standard of living they hope for in retirement. 

Targets

PLSA said national retirement income targets – which are currently used successfully in Australia – would provide savers with tangible income goals which take into account what they need to save in order to achieve different standards of living in retirement (minimum, modest and comfortable).

It added: "This will address one of the key challenges facing savers, as there is currently no widely-accepted and generally-understood target for retirement income and 77% of people admit that they do not know how much they need in later life. 

"Four out of five people said that a national retirement income target would help them plan for retirement."

People aged between 55 and 64 said that for a single person annual income might be a minimum of £10,000 to less than £15,000; a modest level of £15,000-£25,000; and a comfortable level of more than £25,000. 

Empowering savers

Graham Vidler, director of external affairs at PLSA, said: "We all know we need to save for retirement, but few of us know how much we might need to live on or whether we are on track to hit that target. 

"The PLSA will be consulting widely to understand how the industry and Government can help people build and reach a retirement plan. 

“As part of this, we are asking difficult questions which need to be answered to help more people make the right choices around retirement. 

"We are also looking to develop a new set of retirement income targets that will empower savers by providing tangible targets for them to achieve.  

"We look forward to working closely with stakeholders to build a retirement savings market which is truly focused on the end users – savers."