This is a Woman&Home advertorial.
There are a few ways we all underestimate just how much we are going to need to fund our later life:
Life expectancy: A woman retiring age 65 today can expect to live another 21 years on average…and life expectancy is increasing.
Inflation: It might be at an historical low now, but over time inflation will eat into the spending power of your pension pot (which is why it is important to keep the remainder growing even after you start accessing your cash).
How much you need depends on the lifestyle you want and whether or not you still have commitments such as a mortgage or borrowings.
But roughly: to cover basic living costs of £9,500 and One 2 week holiday a year, A health club membership, A concert, play or show once a month , A weekly dinner or drinks with friends, And a car with five-yearly upgrades.
You will need over £24,000 a year before tax. So that £250,000 pension pot (which is way more than the average) would only last 10 years.
Visit our pension calulator to work out how much it will cost to fund the lifestyle you want.
Then to find out how much you might need to save to build up enough in your pension to fund this lifestyle, click here