Most are unlikely to reach their target without increasing pension contributions significantly.
Pension savers are aiming for an average annual retirement of income of £30,805, with those in younger age brackets expecting the highest amount.
The findings come from a poll of 2,000 UK adults carried out by pensions advice specialist Portafina.
Among those polled there were stark differences in expectations across both gender and age.
Women were found to expect an average retirement income of £31,732, while men expected an average income of £29,316.
The poll also showed a potential negative correlation between age and retirement income expectations. For example, those aged 45 to 54, part of so-called Generation X, said that they were aiming for a post-retirement income of £25,445, on average.
In contrast, millennials, those aged between 25 and 34, said they expected an average income of £35,648.
Portofina compared these figures to the October 2019 published study by the Institute and Faculty of Actuaries (IFoA), building on the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards research.
These studies concluded that for a “comfortable retirement”, a retiree would need around £33,000 per year, about £2,000 above the national average expectation.
Millennials were the only sub-group with a target income sitting above the recommended amount.
However, whether millennials (or indeed other groups identified in the study) will achieve these income targets is less clear.
Jamie Smith-Thompson, managing director of Portafina, warns that without committing to large contributions through their earning years, many are unlikely to meet these targets.
He notes that although people’s retirement income expectations are quite modest “they are still unlikely to reach their target without increasing pension contributions significantly”.
“Too many have been making minimum contributions for too long and that reality is beginning to show in the predicted retirement income shortfalls that our research reveals.”
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