The average person aged 55 and over wants to save a pension pot of £100,000 - but at their current saving rate they will have just under £32,000.

Nearly £70K shortfall for over-55s pension pots revealed

By Charlotte Beugge 17.09.12

The average person aged 55 and over wants to save a pension pot of £100,000 - but at their current saving rate they will have just under £32,000.

Brits face a huge shortfall between what they want to save for their pension and what they are likely actually to have accumulated.

Figures from HSBC found that while the over-55s want a pension pot of £99,495 if they carry on saving at the rate they are at the moment they will have just £31,900 - a massive shortfall of 68%.

Mind the gap

The figures found that currently those aged 55 plus have a pension pot worth £15,464 and save £1,991 a year into the pension. This age group has the largest gap between actual savings and expectations.

Only those in the 16 to 24 and 25 to 34 age group are currently looking at a surplus based on their current pots and expectations.

Those in the youngest age group currently have pension pots worth £4,187 and are saving £1,033 a year which would mean by the time they retire they would have a pension pot of £99,982.

But they said their ideal pension pot would be £48,395. Those aged 25-34 have a current pot worth £6,085 and are saving £1,526 a year making a pot on retirement of £104,538 - £26,271 more than they said their ideal pot would be.

Older problem

Once people pass 35, then the gap between expectation and the likely result reverses so they will have smaller pension pots on retirement than they hoped for. Those aged 35 to 44 currently have typically a pension pot worth £5,980 and are saving £1,402 a year into it - less than those in the 25-34 age group.

At that rate, by the time they retire they will have a pension pot of £62,409 compared with the £88,467 they would like.

And the gap widens more: for the 45 to 54 age group the average pot will be £11,385 and with an annual saving of £1,857 they will have a pension pot of £52,299, but would like to have £101,790. Although the over-55s make the biggest annual deposits of £1,991 they have left it late to build up the kind of pension pot they want.

1. Quick tips

2. If you have a money purchase or personal pension, you will be accumulating a pension pot
3. This will be used at retirement to buy an annuity which will then provide the income for the rest of your life
4. The state pension is currently £107.45 a week - a good reason to save into an employer-provided or personal pension

You can get a state pension forecast so you know what you'll get - helping you plan for your retirement