Britain's Early Retirement Hopes Hit by Pension Reality - Retire Early and Live on £960 a Month

LONDON, December 13, 2012 /PRNewswire/ --

• Four out of five investors hope to retire before 65 but in reality only 51% think they will be able achieve this
• 24% think that a £200k pension fund will enable them to live comfortably, in reality leaving them with just £960* a month
• Selftrade urges investors to take control of their retirement

New figures* from online execution-only stockbroker, Selftrade, show that 82% of investors under the age of 60 hope to retire before they're 65 but only 51% realistically expect to be able to do this. While 22% expect to retire at 65, 27% believe it will be at least aged 66 or over.

However, despite managing their retirement expectations, investors could still find themselves caught short, with nearly one in four (24%) thinking that a pension fund of £200,000 or less will allow them to live comfortably in retirement. In reality this means they will be living on an annuity income worth just over £11,500 a year (without basic State pension), or £960 a month.**

Selftrade's figures show that a further 24% are saving towards a pension fund between £200,000 and £400,000 but a pension pot of £400,000 is still well below the UK average wage of £26,200.  One in five (19%) has no idea how much they need in their pension fund in order to live a comfortable lifestyle.

Size of pension fund investors think they will need to live comfortably in retirement:

    Amount of pension fund  % of investors
    - GBP100,000            15%
    GBP100,000 - GBP200,000  9%
    GBP200,000 - GBP300,000 16%
    GBP300,000 - GBP400,000  8%
    GBP400,000 - GBP500,000 10%
    GBP500,000 - GBP750,000  9%
    GBP750,000+             14%
    Don't know              19%

Dave Jeal, Head of Product Management at Selftrade says: "We are seeing a big gap between investors' retirement aspirations compared to their expectations and while many of us hope to retire early our expectations are slightly more realistic. However, our data shows that investors' pension savings expectations still remain way out of line with reality. The truth is that based on what they think they'll need to save, retirement is not going to be comfortable.

"Taking control of your pension planning early on is vital. A SIPP can be a good way to do this. You get the flexibility to invest in the way that will deliver your objectives - with a wide choice of investments, lower-costs and greater visibility of how you're doing. Selftrade has recently launched a low-cost option for pension savers called the 'Sovereign SIPP', which enables people to look after their pension investments cost-effectively and transparently."

Mr Jeal adds:

"It's never too early to start planning for your retirement.  The oft-quoted rule of thumb is to divide your age when you start your pension by two; the result is the percentage of pre-tax salary you should be contributing.  Then check out what this could mean in terms of your retirement income with a pension calculator."

Notes to editors:

*Results from quarterly brand tracking survey carried out by HPI Research amongst Selftrade customers and customers of other stockbrokers aged between 25 and 60 in July 2012: total sample size = 549. Please note that figure of £960 excludes basic State pension.  

The value of investments can fall as well as rise and any income from them is not guaranteed. Investors should be prepared to lose their investment. Past performance is not a guide to future performance.

For further information or to arrange interviews please contact:
Anna Schirmer / Emily Falla
Tel: +44(0)20-7294-3605 / +44(0)207-294-3692
Email: [email protected]  / [email protected]
Or
Georgette Harrison at Selftrade
Tel: +44(0)20-7517-4587
Email: [email protected]  

SOURCE Selftrade