According to a new report, the perfect amount of retirement income is £17,500 a year.
This amount will afford the majority of people an excellent standard of living during their later life.
The report found that most people’s requirements in retirement was to be free from debt, have a reliable motor car and take a two week foreign holiday each year.
More than 2,000 workers were surveyed for the study, each of whom is paying into a defined contribution workplace pension.
The Bank calculated that to enjoy the lifestyle they wanted to live in retirement the average person would need around £17,500 a year. To achieve this, a person would need to have accumulated a pension pot worth £350,000 based on the latest annuity rates.
Under new rules announced in the Spring budget, pension savers no longer need to buy and annuity or drawdown product once they retire and they can access their entire pension pot as they see fit, although they will be subjected to income tax if they go over their personal allowance.
However, many retirement experts are concerned that people are not saving enough into their pension pots and will not be able to build up enough savings to enjoy a comfortable retirement.
In addition, many are overestimating how much their pension pot will yield when they retire and underestimating how long that pot has to last.
Many do realise that they may need to work for longer to fund their retirement, and almost 80% of people surveyed by Barclays admitted they expected to have to continue working much later in life than their parents did.
More than half of those questioned felt they would need to seriously budget during their retirement as they wouldn’t have built up a big enough pension pot to enjoy their current level of living.
A spokesperson for Barclays, Jonathan Parker, said that younger workers needed to take a good look at their financial situation to ensure they will have saved enough to enjoy a financially safe retirement, rather than start to worry about it much later down the line when it will be too late to address.
With the continuing success of Automatic Enrolment more workers than ever are now contributing towards a workplace pension. The Barclays’ report suggests that in order to achieve a decent standard of living in retirement that people increase the amount of money they contribute towards their pension schemes from 8% to 12%.