According to new research by Nationwide Building Society, future pensioners are at risk of underestimating the amount they need to save to retire comfortably by more than £68,000.
The building society’s survey found that 33 per cent of middle-aged savers, who will soon be approaching retirement, believe that they will be able to live on their state pension alone when they retire.
Despite their findings, respondents only expect their monthly shortfall (the difference between their current salary and pension income) in retirement to reach an average of £208.
However, Nationwide believes that the average shortfall could be around twice as much, with the average retiree receiving £505 a month in state pension but requiring up to £885 a month to live on.
This will mean that those without an additional private pension face a shortfall of £380 a month, or £4,560 a year. During an average 15-year retirement this shortfall would amount to around £68,400.
Incredibly, despite this significant gap in income, only 40 per cent of the 1,000 people aged 40 to 60 that Nationwide spoke to had some form of private pension.
Jason Hurwood, Nationwide’s Director of Home Propositions, said: “We are living longer and need more money to keep us going. The reality is that without adequate income, and potentially living a third of our lives in retirement, older people risk missing out at a time in life when they want to relax and enjoy themselves.”