Setting savings targets can feel overwhelming, but it's never too late to start building financial security.
Setting savings targets can feel overwhelming, but it's never too late to start building financial security. Your savings strategy should match where you are in life right now and understanding what's realistic helps you create achievable goals.
What government data shows about UK savings
UK households are saving just over 11% of their total income. However, the reality is concerning: 4 in 10 working-age individuals are not on track to meet their target for adequate income in retirement, while 1 in 8 are not on track to meet even a minimum living standard.
How to set savings targets for life stages
Your savings approach evolves throughout life. Government research shows most people commonly start planning for when they'll stop work and move into retirement in their 40s and 50s, though 43% started saving for retirement in their 20s.
Your forties and fifties present a crucial time to focus on assessing your retirement readiness and maximising contributions while you still have earning potential.
Calculate your retirement income gap using the Pensions and Lifetime Savings Association's Retirement Living Standards, which show you need £31,300 annually for moderate retirement living and £43,100 for comfortable living, with the State Pension covering around £11,500. This means you need to fund £19,800-£31,600 annually from private savings.
What are ideal savings by age?
The government's analysis confirms that there is no perfect measure of adequacy for future pension incomes and what an individual may need in retirement is highly dependent on their own preferences and expectations.
Rather than following rigid formulas, focus on building consistent habits. The government notes that 75% of Defined Contribution savers have not chosen to change their contribution levels in the past three years, showing many people stay at minimum contribution levels when they could potentially save more.
Making your personal savings plan work
Start with what you can afford and build consistency. Even small amounts matter when saved regularly. The government provides free guidance through MoneyHelper's pension calculator to estimate your retirement income and identify ways to increase it.
The midlife MOT is a free online support tool for people in their 40s, 50s and 60s covering finances, health, and career planning. Consider maximising tax-efficient savings. ISAs allow you to save up to £20,000 annually tax-free, and pension contributions receive government tax relief.
Here's what the research tells us: consistency beats perfection. You don't need to hit specific savings milestones by certain birthdays. What counts is saving something regularly, boosting it when you can, and using free online tools to track where you're heading.
Our advisers can help you create a personalised savings strategy. Get in touch for a free consultation.
