Trustnet Magazine Issue 13 December 2015 | Page 25

IN THE BACK

POT SHOT

Most people don’t have a clue about how much they will need in their pension
pot to fund their lifestyle in retirement, writes John Blowers

W

e are about to introduce
a whole new section on
Trustnet Direct aimed at
helping people understand how
much money they will need in
retirement and how to build a
pension pot to fund that lifestyle.
There are some shocking facts
in the UK that suggest that, as
a nation, the majority of us are
walking off a cliff and into a
world of poverty and deprivation
completely out of kilter with how
we have lived our working lives.
This shock of being relatively
well off while you are employed
and poor in retirement can partly
trustnetdirect.com

be explained by our addiction to
debt. Rather than putting a little
aside each month for retirement,
we have been servicing the debt
we have accrued to live beyond
our means. We get away with it
when we are working because
we can service this debt with our
income, but when the music stops
at retirement, we have little or no
savings, no income to service the
debt and a massive credit hangover.
Even people who have been
more responsible with debt have
had competing pressures of
what to do with their disposable
income. School and university

fees, house deposits and ultralow savings rates have all eaten
into money that we know we
should be saving for a rainy day, or
retirement.
Ultimately, the average pension
pot in the UK is around £50,000,
which provides an annual income
of a little more than £2,000 a year
if you purchase an annuity or less
than £5,000 a year if you go into
drawdown.
Added to your new single tier
state pension (£155 per week),
you’re looking at a weekly income
of £195 a week. That’s equivalent
to a salary of £10,000 a year.
25