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Research shows that many young people underestimate the total amount of money that they will need for their retirement.  Most of those who were involved in the study were in their 20s and 30s with the majority of them underestimating a comfortable retirement by almost a quarter of a million pounds.

According to the research nearly half of those in the study have no idea how much they will need to save for a comfortable retirement.  Around 45% of those in their 20s and 30s estimated that they would need a lump sum of 262,000 pounds, when in fact a total of around 500,000 pounds would be a sufficient amount needed to have a comfortable retirement.  With 500,000 pounds you would receive an annual pension of 25,000 pounds, which is the current average annual income of British workers. 

The same survey also revealed that not only were the younger generations underestimating their retirement funding but a quarter of those who were involved in the survey and were in their 50s had no idea how much they would need to save for a comfortable retirement.  These findings can be worrisome, especially with the amount of debt that many Britons are falling into which is then causing them to dip into their savings which affects their financial future. Still others are taking on long term home loans with the expectation of still making loan repayments beyond the current retirement age.

If the retirement fund is below the necessary amount needed for a comfortable life then someone will easily find themselves working well beyond their retirement age and borrowing funds to make ends meet.  That is why it is important for people to realise that saving for a retirement is important and should be something that is started as soon as possible.