New research has revealed how much money couples need to save for retirement based on whether they are in their 20s, 30s, 40s or 50s.
Young savers in their 20s will need to put away at least £131 a month, while those in their 50s should aim to set a side a hefty £633, according to Which?.
How much will I need to put away?
To accumulate an annual income of £26,000 in retirement, a couple would need a substantial defined contribution pot, even with the current State Pension.
The tables below show how much a couple in their 20,30s,40s and 50s would need to save per month for a comfortable and a luxurious retirement.
It also shows how much they need to pay monthly if they have already accrued a £100,000 pension pot.
This calculation assumes a 20% tax relief on your pension contributions and the figures combine the income you take from your private pension savings along with your State Pension.
The sum saved is assumed to grow by 3% a year after charges.
Figures shown are in today's money; to save the future equivalent, your contributions need to keep pace with inflation and your pension savings will need to grow by more than inflation (after charges) as well.
What are these figures based on?
Which? says that retired couples need £18,000 a year to pay their household essentials including food, utilities, transport and housing. If they factor in extra treats, like short-haul holidays and certain leisure activities, the number climbs to £26,000.
A luxurious retirement with expensive holidays and new cars will set them back £39,000, according to the research.
How big does my pension pot actually need to be?
Which? calculates that to get a guaranteed £26,000 pot, inclusive of State Pension, you should buy an index-linked joint life annuity which would need a £370,000 pension pot.
If your money were to be invested in an income drawdown plan, you would need £210,000 saved in a defined pension contribution.
For the more luxurious retirement lifestyle, including the State Pension, a couple would need a £1 million pension pot to buy an index-linked, joint-life annuity.
Those using income drawdown would need £550,000 in their pension.
Gareth Shaw, head of money at Which?, said: “When it comes to saving for your retirement, start early and save often.”
“Being a part of your company pension scheme is a good start, but, depending on how much you contribute, you could well need to save a little more to have the lifestyle you want in retirement.”