Despite increasing numbers of people being aware of the need to save for retirement, few unadvised workers realise how much they will need, the de Vere Group reports.
Data gathered by the international advisory firm revealed that almost 80 per cent of new clients underestimated how much they would need to sustain themselves through retirement.
de Vere Group chief executive, Nigel Green, said the firm’s survey of more than 600 new and potential clients, revealed a “black hole in the detail” of what people will need to support their retirement.
“They know that the Government won’t be able to support them as it has done for generations before due to an ageing population and shrinking workforce; that living, health and care costs will increase significantly… meaning that accumulated funds need to go further,” he said.
“However, what is alarming is that the vast majority do not know just how much they will need to save.
“Our recent research highlights that there’s one very definite common theme: before they sit down with an adviser, the overwhelming majority of people underestimate how much they need to be putting aside for their retirement.
“When our consultants start to work with new clients to tailor-make a financial plan, the clients are typically shocked when it is set out for them how much they need to be saving to fulfil their own retirement ambitions.
“They have usually considerably underestimated the funds they will need.”
Green warned unadvised workers to “take their heads out of the sand and get informed”, saying it was “better to know and start to get on track sooner rather than later”.
