Two-thirds of workers not saving enough for retirement

Almost two-thirds of working age individuals who began seeking financial advice last year from one of the world’s largest independent financial advisory and asset management organisations were not adequately saving for their retirement when they started, it has been revealed

 
In a global survey of over 800 clients, 65% of new clients the deVere Group took on as a firm in 2023 were not saving enough in order to be able to have a “comparable lifestyle in retirement.”

A comparable lifestyle in retirement refers to maintaining a standard of living in retirement that is similar or equivalent to the one experienced during an individual’s working years. This includes having enough financial resources to cover essential expenses such as housing, healthcare, food, transportation, and other basic needs, as well as discretionary spending on activities and interests that contribute to overall well-being and enjoyment.

CEO, Nigel Green, says: “This is an alarmingly high percentage.

“The results highlight a critical gap in retirement savings awareness and underscore the pressing need for individuals to prioritise and optimise their retirement planning.

“When we initially meet with new clients, we do detailed studies of their current financial situation. Then we discuss what age they would like to retire and how much money they would need to have saved over their working lives in order to achieve this.

“Last year, only about a third when we first met them were saving enough to be able to make their own long-term financial objectives a reality and having enough money to last throughout their retirement.”

He continues: “The high number of individuals not having accumulated enough for their retirement is concerning for many reasons including because we’re living longer, meaning the money we save throughout our working lives has to last longer.

“In addition, it should be noted that it might not be possible to work longer if necessary due to ill health, lack of career opportunities, or because you need to look after sick or elderly relatives.  Ultimately, that decision might not be yours.”

Retirement planning is a complex and dynamic process that requires careful consideration and professional guidance. deVere Group is committed to empowering clients with the knowledge and solutions needed to secure their financial futures.

“The survey results serve as a wake-up call for individuals to reassess their retirement savings goals and take proactive steps towards achieving a comfortable retirement,” comments Nigel Green.

Bearing this in mind, how much income should we be putting aside for our retirement?

That will depend on your age and when you started saving, amongst other factors.

However, in general terms, deVere Group, which has helped tens of thousands of savers get on track with their retirement planning, suggests that people aged between 25 and 34 should be saving between 15 and 20% of their income, for those between 35 and 44 this should increase to 20 to 30%, for the 45 to 54 bracket it goes to 30-40%, and those 55 and over would need to save a considerable amount more.

“Of course, this all depends on the individual and their personal and professional circumstances, as well as their objectives and desires for retirement.”

Nigel Green concludes: “Whatever stage you are at in your working life, the time to start saving is now. The earlier you begin, the easier it will be to reach your long-term goals.”