Nearly two thirds (61%) of wealthy individuals say they are unaware of the size of their pension pot despite also believing the savings required for financial peace of mind is £900,000, according to new research carried out by private and commercial bank Arbuthnot Latham.
Arbuthnot Latham’s Financial Wellbeing Report partnered with Atomik Research, an independent market research agency, to survey more than 500 UK residents with a net worth of at least £100,000, which took place between 30 November and 5 December 2023.
60% of respondents had a net worth (excluding property assets) of between £100,000 and £499,000, and 40% had at least £500,000.
The proportion of those aware of their savings was larger in the ‘high net wealth’ category – those with £500,000 or more in investible assets – at 71%, compared to only 54% of those in the ‘lower’ net wealth category (£100,000 – £499,000).
Women were also less familiar with their pension pots than men on average, with nearly four in ten (38%) women reporting they were unaware of the value of their savings, compared to 26% among male respondents.
There was also a gender gap in how much men and women though they would need in retirement.
• Male average: £934,957.26
• Female average: £829,109.264
Although respondents believe they could finish work in their early 60s (with 62 being the average age they were looking to retire), they are less certain about whether their pension savings will be sufficient to sustain their lifestyle:
• Eight in ten (80%) say they would still be able to achieve their retirement age given the current financial outlook.
• However, one in five (20%) reported that they would miss their target retirement age based on the current financial outlook.
• Younger savers are also more optimistic, with more than half (55%) of those under 35 believing their pension will enable a comfortable retirement compared with just 24% of those aged 45- to 54.
Eren Osman, managing director, wealth management, said: “The people we spoke to said £900,000 of pension savings would be enough to give them financial peace of mind. However, this figure will be difficult to maintain in retirement without careful planning.
“While it is a significant sum, inflation can erode the value of your pension pot over time; sustained growth is crucial in your portfolio.
“Saving for retirement is the bedrock of a financial plan, but our research reveals significant gaps in people’s overall understanding of whether their pension savings will support a comfortable retirement, meaning many will miss their target retirement age or may be forced to downgrade their lifestyle expectations.”
