If you are retired and can tick these boxes, then you are living the dream according to the latest research by a pension provider:
- You spend an average of £752 on holidays overseas each year
- You spend at least 364 hours a year with your children or grandchildren and £249 on gifts for them
- You spend 312 hours and £1,716 a year socialising with friends
- You spend 468 hours and £480 a year on hobbies
- You retired at 65 years old
- You live in a detached house with a garden
- You live in a village
- You have good transport links and are within walking distance of local shops, pub and amenities
- You live no further than 24 miles from your children and grandchildren
These are the statistics that define a happy retirement, says pension firm LV=.
Calculating the cost
The firm then calculated how much the dream retirement costs and found average annual living bills of £7,623 plus retirement expenses come to £10,820. Over an average 17 year retirement, the cost is adds up to £225,756.
Unfortunately, that’s where the problem starts for most people, says LV=.
Around 8% of 60 to 65s confess they have no pension or retirement funds. This means an estimated 315,200 people rely on nothing but the state pension of £110.15 per week, or £5,727.80 a year to fund their retirement.
As a happy retirement costs at least £10,820 a year or £208.08 per week, these people fall short of their dreams by £5,092 in their first year and £106,243 over their retirement.
Bridging the pension funding gap
Of those 60-65s who have a pension, more than a quarter (27%) do not know how much their pension is worth. Industry figures reveal a third (29.7%) have a pension pot of less than £10,000.
Around half of those approaching retirement do not know how much they will have to spend in their later years as they have not had any financial advice.
Vanessa Owen, LV= head of annuities and equity release, said: “The research shows that most people have modest hopes for their retirement.
“However, even though many of the factors that will bring them contentment in retirement do not cost much, if anything, but retirement does come with almost a £250,000 price tag. People approaching retirement should take advice on how to maximise how they will bridge the gap between what they are likely to have to live on and what they need to make them comfortable.”