Almost three-quarters (74%) of Brits, both in the UK and abroad, are not on track to retire with sufficient funds to maintain their current lifestyle, reveals a new survey by independent financial advisors deVere Group.

The survey results suggest that many people are underestimating how much they need to save for retirement, which could have grave long-term implications. 

Nigel Green, CEO and founder of deVere Group, says: “There’s a retirement crisis looming for Britons. Too many people are simply not saving enough, and they don’t realise just how much more they will need to retire comfortably in the future.”

He maintains that many Brits are not considering the full range of factors that will affect their retirement, such as inflation and healthcare costs. 

When asked, “What percentage of your current income could you live on in retirement?” most respondents grossly underestimated how much they would need, with many unaware of how rising inflation could erode their purchasing power over time.

Nigel Green explains: “It’s not just about what you have in the bank today, it’s about the real value of that money when you retire. If you’re earning £50,000 today and you think £1 million will be enough to sustain that lifestyle, you need to consider inflation. 

“With inflation running at 3.5%, in 20 years’ time you’ll actually need £2 million just to have the same spending power that £1 million gives you today.”

The longer the retirement period, the greater the financial challenge, particularly when healthcare and social care costs are added to the equation.

“People often believe they’ll spend less in retirement,” says the deVere CEO. “But in many cases, the opposite is true. You might spend less on commuting and work-related expenses, but healthcare costs increase, and many people find that they want to spend their time travelling, spending time with family and engaging in hobbies. These things all cost money, and if you’re not prepared, it’s easy to run out of funds.”

Importance of investing

deVere Group’s survey also highlighted a lack of awareness of the importance of investing as part of retirement planning. 

Many people, they say, focus solely on saving, not realising that investing is critical to growing their wealth over time, especially with inflation eating into their savings.

Nigel Green is urging people to think strategically about their financial futures: “It’s not just about saving. Investing is essential to building a retirement fund that will last. The compound effect of investing over time can significantly boost your retirement savings, helping you achieve a sustainable income in retirement. 

“Simply saving without investing can lead to serious shortfalls, especially when inflation is taken into account.”

“It’s vital to regularly review your retirement goals, evaluate how much you’ll need to live comfortably, and adjust your savings and investment strategies accordingly.”

So how much will YOU need to have saved for the retirement you want?

Working that out can be a tough business, but using the RetireEasy LifePlan it’s easy to factor in variables such as inflation in future years, interest rates and stock market returns, and run different scenarios to ensure that your plans are resilient. The information you need is then delivered in easy-to-understand charts and graphs – enabling you to make informed decisions about whether you need to adjust your plans, or how and where you are investing your money.

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