Pension income

In my experience the best advice is not to work until you have enough to fund a dream retirement but work out what you need for a contented secure retirement and work to that. Because so many people never get any retirement, many no retirement in health that enables the dreams to be fulfilled and for many the big dreams aren't that great anyway.

Depends how much you earn now too
I've no hope of 80k a year pension when I earn a quarter of that, so it'll be state pension and whatever tiny employer one I have

If you are retired there are plenty of opportunities to reduce costs that you can not do when working. Out of peak travel and last minute bargains, more time finding best deals on services etc, home cooking and DIY, free or off peak social events, completing all the offer forms to get rewards and freebies, it goes on. Then there are all the costs of being at work like travel, clothing, eating meals on the run, contributions, paying for work on the house or garden you don't have time for, restricted peak times for travel and entertainment, that goes on too. Even running an additional car or one car might not be needed with your extra time to plan public transport.
Pension industry never quantifies these when they say what you might need in retirement but they are significant.

My parents had their last foreign holiday when they were 94 and 96! They were having two or three holidays a year throughout their 80s. I have every hope I’ll do the same.

I’m not sure about the 72 bit if you are in decent health. My parents and aunt are about 75 and are still travelling hugely to places like Japan, India, walking holidays in South America. They’re hoping to get another 8-10 years of that kind of travel before they slow down

For homeowners, it is possible to live a comfortable life on state pension alone, with a small savings pot for emergencies.

It really isn’t. If I was single my state pension would barely cover essential bills and food. I wouldn’t be able to run a car, eat out, go on holiday or do any of the life enhancing stuff that makes retirement pleasant.

It’s so individual. A lot of our current income goes on mortgage, school fees and savings so it’s not a good guide to what we’ll need in future. I do think it’s helpful to have a rough idea how much income your pension savings will generate.

We are aiming for (real terms) £100k as a couple pa. This will be a mix of income from ISAs, two pension pots, a small defined benefit scheme and two state pensions.

You sound a lovely person @RosiePH but is all that really your responsibility and is it something you should be worrying about 15 years before it might or might not happen.
Maybe time to think more about ensuring there is no expectation you will be funding their refusal to shop in Aldi and your obvious compassionate nature is directed more towards your children. Though the pension industry do invest heavily in getting us all to worry about our future inability to fly around the world when retired, so I can see where you are coming from.

Im really bad at paying attention to this kind of thing TBH. I'll retire with a 30 yr NHS pension and as a home owner (who naturally lives cheaply) I think I'll be fine!
I def dont need a pension pot that pays me 4 times what I earn now thats for sure!

We have a comfortable life on about £40k. Help out our grown up children occasionally, treat the grandchildren, have the odd holiday and everything we want on that figure. We do have share investments and savings as a buffer too, should anything go wrong in the house or if we need a new car at some point. If you're mortgage free I believe that figure is plenty. As for the poster saying £80k, as public servants we never earned that amount when we were working!!!!!

I always assume a lot of the you need fifty squillion in your pension pot articles are written at the behest of pension companies.

The main things are whether you still have housing costs and are single or in a couple.

Singletons with rent to pay would be squeezed if their only income was the state pension, even if the got some element of pension credit/housing benefit. A mortgage free couple OTH should be able to pay for their essential bills & food.

Private pensions can pay for a nicer lifestyle, cars, meals out and holidays on top of that. I'm just not sure that you need millions & millions. DH and I are fortunate to have a mix of public sector and private pensions and our disposable income is likely to be higher as mortgage free pensioners than it is currently.

The predicted annuity rates are just rubbish and actually run for the benefit of the industry, like most of the pension industry.
300k at 67 will give you 15k a year just depreciating the capital until you are 87. High pay interest accounts as it depreciates will give you another 5 years on your 20. Taking you to 92 with an income of 15k. They will make it confusing and through their expert investment strategies give you around 9k a year for life. Their expertise benefits you if you get to about 112. If it wasn't for tax relief, which is basically a public subsidy, most pension investments wouldn't even beat best saving rates.
How much you need is completely dependent on your circumstances and expectations of what you want to do. Not what anybody else says.

I left the civil service with £135k pot equivalent and took home around £700 per month - that has increased being index linked (nicely lately!). Not reached 67 yet, but will get state pension on top.

@DragonFly98 , genuinely baffled by your post. £80K a year is around £5K take home per month (to live on as a couple). As I've already explained, it depends on what lifestyle you would like surely?

I've already said we like to eat out a lot (and would like to continue to do this as we live in a place with many great restaurants) and take holidays which will increase once retired. I wouldn't say that is an excessive monthly income for two people who want that lifestyle. It certainly won't be enough for us to take several long haul holidays a year @£10k a pop and go to Michelin starred restaurants which is what we'd like to do. Friends of ours live this lifestyle and you'd need a lot more than £80K. Other friends have simpler lives and hobbies so don't need to spend a lot. On top of leisure stuff you still have bills and house maintenance, possibly a car to pay for.

It's all a matter of choice and cutting your cloth if you can't afford it.

You mean annually not monthly for those pot sizes.

Thanks for that. I'm off to reassess what I need now.

Is this a genuine post , you don't need £80k a year for holidays , house maintenance and eating out!

State pension, one (small) private pension plus our family SIPP which owns a tenanted commercial building and holds a decent amount of cash which has built up over the 22 years the SIPP has been running. Right now, we're still working while we try to figure how we can retire from our business without closing it down. Holidays seem like a good idea but there's not much scope for this summer.

The numbers in that article seem low. Certainly lower than the predictions my pension provider is giving me.

State pension, small private pension and quite a lot of investments that give me extra income. It doesn't all have to come from pensions. I thought of topping up my pension from savings, but I could get higher income from keeping it in savings and have easy access to the capital if I want. Annuity rates always seem really low.

For someone who rents, nothing changes

That's not strictly true. I rent from a HA and my rent would be covered by benefits if I was on state pension alone. For private renters, it would be more tricky. They could still get benefits for their rent but it may not be enough. That said, there are over 55's housing schemes with rents that are within the allowances. They're also easier to get into than generic SH, due to the age limit.

The people who would struggle are those private renters with too much of a pension to get any additional benefits, but not enough to cover their costs. They will be in trouble.

It's one of the big reasons I always say people need to look at their own circumstances and not just blindly think that a smallish private pension is better than none. There will be a group of people for which that isn't true.

I've got a public services pension which is good but I'm not really sure how much I will have each month, but I would be mortgage free so hopefully wouldn't need a huge amount. At the moment the majority of my money after bills is spent on my teenagers so if I'm just supporting myself I don't think I would need a huge amount of money. Enough to maintain house and replace things that break. Also as both my sons are unlikely to live locally due to the careers they have chosen I would like enough money to visit them every other month and stay in an air b n b and take them out for dinner. I'm not too bothered about big holidays any more as I have done a lot. I'm not sure what the figure would be for all of that.

I'm late 40s so starting to take this very seriously but still have some time to save. Its depressing to see how small the difference is between having a £37k pot or a £150k pot (£1007 per month vs £1341 per month) I should have around £300k pot by retirement if i keep going full time until 68yrs...... not sure working full time until state pension age is worth the sacrifice. Would like to go part time in my mid 50s (once mortgage paid off) even though it means putting less in to pension. I probably need a financial advisor!

I don't think it's ever possible to work out how much you need on the basis of what another person has.

My best friend and colleague retired just before me and we have similar pensions. But she has a larger house & garden, a car, three pets and enjoys foreign holidays. I no longer drive, don't have pets and all of my holidays are family visits within the UK. So, of course, she has a different level of spending to me.

Having had a job where I wore a uniform, I am finding that I spend more on clothes than I used to, but am pleasantly surprised that I don't seem to spend significantly more on energy costs now that I am spending more time at home.

Only you know what your expenditure is likely to be . . .