Skint Dad

Where Every Penny Counts

  • Home
  • Save money
    • Latest supermarket offers
    • 1p Saving Challenge
  • Make money
    • Best Paid Surveys
    • Quidco New Member Offers
    • Genuine Work From Home Jobs
  • Manage money
  • Cheap recipes
    • Fakeaway Recipes
  • Win
    • Skint Dad competitions
  • Deals
    • Amazon Discount Tool
  • Join us
    • Newsletter
  • About
Home / Manage Money / Find Out How Much Money You Really Need for Retirement

Find Out How Much Money You Really Need for Retirement

By Ricky Willis | last updated 31st January 2019

Subscribe to our weekly newsletter and get a £16 Quidco sign-up bonus
Share
Tweet
Pin

Written in collaboration with Profile Pensions

This site contains affiliate links. We may receive a commission for purchases made through these links. [Learn more]

Straight up confession – this is all about pensions.

But, don’t shut down your browser yet!

Pensions can be seen as boring (and yes, they can be a little bit), but this is not about the boring, baffling stuff.

This is all about showing what you really need, so we’ve looked at a nifty pensions calculator by Profile Pensions.

In the words of a meerkat; simples!

Time flies

It was just 5 minutes ago that I was sitting in the school hall taking my GCSE exams.

Ok, maybe not 5 minutes, but surely it was no more than 5 years ago.

i still think 1990 was 10 years ago

Wasn’t 1990 10 years ago? It really does feel like that but, in a blink, 20 years have gone!

I’m feeling old!!

I’m not old

I remember getting my first full-time job and having a piece of paper put in front of me from the HR person.

“Sign this if you want to join the pension scheme.”

Yeah, right!

I don’t need a pension. Pensions are for old people, and I’m not old – I need that money for bills (and beers! (obvious priorities for a teenager)).

But, very quickly, I’ve come to realise that 1990 wasn’t 10 years ago, and I’m getting older much faster than I like!

It’s never too late to start

counting change

Even now, it’s around 30 years until my age of retirement.

It’s still a long way off, but the last 20 years have run away with me, so I’m sure the next few decades will as well.

Putting saving for a pension off because you never think retirement will happen is a no-no.

Starting to save for a pension today will get you on the right path.

Thing is, if you’ve been thinking you can fall back on your State Pension from the government it’s not going to get you very far.

While the State Pension will help your pension income, you will likely need a lot more to get by.

How much do you need for retirement?

The days when we could retire, draw our pension and live happily ever after are a thing of the past. What are the other options for a comfortable retirement?

How long is a piece of string?

77% of people in the UK have no idea how much money they really need for their retirement.

It may come down to being worried to look, not having a clue where to start, being baffled by the complicated stuff that gets put out there, or a mixture of it all.

How much you need for a pension all comes down to what kind of lifestyle you want (and can afford) and when you want to pack in work.

So, how much is that in real terms?

There is an easy way to find out, and you just need to use a simple pension calculator like this one from Profile Pensions.

How does the pension calculator work?

With just a few basic bits of information (and nothing personal), you will be able to find out how much money you need to save for the lifestyle you want in later life.

https://skintdad.co.uk/wp-content/uploads/2019/01/pensions-profile-calculator.mp4

 

Just pop in if you’re single, or in a relationship, and whether you’ll be a homeowner or renter when it comes to retirement.

Then, choose when you want to stop working.

In the click of a button, you’ll get an idea of how much you’ll need to retirement.

The pensions calculator was created by Profile Pensions to take away the burden of not knowing what you need to do for your retirement.

They’ve made it really easy to use and you can see simply how much extra pension you may need on top of the state pension by adjusting the details.

Less than you thought?

In good news, you won’t need to have the same annual salary as you do today because you won’t have as much to pay out for.

You likely only need around two-thirds of the income you have right now to continue with your same lifestyle.

There won’t be mortgage costs anymore (as you should have cleared the loan), you won’t need to pay any more commuting costs to get into work, and you will have stopped paying any pension contributions as well.

If you’ve been paying all your National Insurance contributions, you will also get a State Pension.

You can check how much state pension you’ll likely get using the government calculator. This will mean the amount you need to save for retirement comes down too.

What does it mean?question mark

You really need to have a go at the pension calculator yourself.

Once you’ve done it, you’ll be able to see how much income you’ll need for either a modest or comfortable life.

You can also look to adjust the age you want to retire to see how that affects the money you’ll need.

This is what ours will look like if we carry on with our same current lifestyle.

We are married, live in a privately rented home, and I obviously would love to retire as young as possible.

profile pensions calculator summary

What does yours look like?

What’s the difference between modest and comfortable retirement?

A “modest life” allows you to get by with basics in life.

Here’s what your life will look like.

You get a self-catering UK holiday each year and days out with family locally.

For food, you’ll be eating basic meals from budget supermarkets, having take outs twice a month and eating out around four times a year

If you buy new clothing, you’ll shop at cheaper shops like Primark.

To get about, you’ll be able to have an older car, and you’ll heavily use public transport.

(For renters, you’ll live in a one-bed social housing flat or within a council retirement estate).

However, if you want more to your retired life, you will need more money.

This will allow for you to have a “comfortable life” and get a few extras in.

You’ll be able to have an annual package holiday and be able to spend more on memberships locally.

You’ll be able to eat our more frequently and have a larger budget to spend on clothing, as well as having a reasonable car.

For renters, you can afford a larger 3 bed home (spending on where you live in the country, anyway).

While this calculator can give a good idea about what you need to aim for when it comes to retiring, it is not financial advice, and you shouldn’t use it to carve out your future.

However, Profile Pensions do offer impartial advice and can help track down your pensions (if you’ve lost any) as well as look for ways to make you better off in retirement.

Save for retirement

saving piggy bank

While it’s great to get an idea of where you need to be, depending on your circumstances, there won’t be enough money alone from the state pension to cover your living costs into retirement.

This means you must start saving for a pension.

If you’re employed, then look to sign up as you get free top-ups from your employer.

For self-employed people (there are 4.8 million of us out there!), pensions seem to go on the back burner. There are around 45% of self-employed people, between 35 and 55, who do not have a private pension.

While you can look at private pension, many self-employed people are also eligible to save with the government’s NEST pension.

It’s never too late to start saving.

The earlier you start saving, the more contributions you’ll be able to add, and you’ll be able to work towards the lifestyle you want when you retire.

Please do be aware that pensions are investments which can go up and down. Therefore, as with similar financial products, your capital may be at risk.

 
  • About
  • Latest Posts
Ricky Willis
A little bit of everything at Skint Dad
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.
Latest posts by Ricky Willis (see all)
  • Christmas Saving Clubs – Prepare for Christmas Early - 3rd February 2021
  • A massive change for the Skint Dad family - 22nd January 2021
  • CheckoutSmart – earn up to 100% back when you shop - 12th January 2021

Leave a Reply Cancel reply

Your email address will not be published.

final sd bio
Skint Dad in the media
HIBS100 Index of Home and Interior Blogs
HIBS100

Find out how to

Save money

Make money

Manage money

Start a blog

Eat cheap

Win competitions

Join us

Information

About Skint Dad

Contact us

Awards, Media and Press

Jobs at Skint Dad

Privacy Policy

Cookie Policy

Terms & Conditions

SKINT DAD®

8b Lonsdale Gardens
Tunbridge Wells
Kent
TN1 1NU

Skint Media Limited
is a registered company
in England & Wales.

Company reg no: 09991508
VAT No: 318 7349 80

Check out our sister site Skint Chef

Copyright © 2021 · Skint Media Limited · All rights reserved · Registered in England and Wales with company number 09991508 · Sitemap · Privacy Policy · Cookie Policy · Terms and Conditions

Skint Dad | Where Every Penny Counts! Logo Header Menu
  • Home
  • Save money
    • Latest supermarket offers
    • 1p Saving Challenge
  • Make money
    • Best Paid Surveys
    • Quidco New Member Offers
    • Genuine Work From Home Jobs
  • Manage money
  • Cheap recipes
    • Fakeaway Recipes
  • Win
    • Skint Dad competitions
  • Deals
    • Amazon Discount Tool
  • Join us
    • Newsletter
  • About