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Savings goals for retirement

This series uses actuarial analysis to explore various ‘rules of thumb’, designed to give savers an idea of how much they might need to save in order to reach a certain lifestyle in retirement.

The IFoA is concerned that many people relying on DC savings to fund their retirement are not currently saving enough to achieve the lifestyle they might hope for or expect. Our work aims to draw attention to this shortfall, and explore the ways in which public policy and individual saving habits might help to close the gap.

A survey commissioned by the IFoA in 2019 revealed that 70% of savers whose workplace pension is their main form of retirement saving, contribute no more than the minimum into their pension. The IFoA’s research suggests that those expecting to afford more financial control in retirement will need to save well above the AE minimum contribution.

Our analysis is based on the Pensions and Lifetime Savings Association’s Retirement Living Standards, which set out the cost of three distinct lifestyle levels of retirement: Minimum, Moderate, and Comfortable. We have identified three Savings Goals, linked to these three living standards: 

  1. People saving at the minimum level mandated by automatic enrolment, and with a full National Insurance record, should be on track to achieve the ‘Minimum’ retirement living standard.
  2. Someone on average full time earnings will need to save around a quarter of their income (26%) to be on track to achieve the ‘Moderate’ retirement living standard.
  3. Someone aiming to achieve the ‘Comfortable’ retirement living standard will need to save more than double what they’d need to save if aiming for ‘moderate.

Saving Goals for Retirement

There is a growing consensus that a bottom-up approach to retirement saving, based on real-life outcomes rather than traditional replacement rates, is an effective way to engage people with their future retirement and save to achieve those goals. We believe that adopting our proposed Savings Goals, combined with the PLSA’s Retirement Living Standards, has the potential to influence the behaviour of both consumers and employers, through clear and simple messages.

The report sets out practical steps that can be taken by individuals, government, employers and the pension industry in order to help individuals reach the retirement they want.



Saving Goals for Retirement series 2020

Throughout 2020, we are exploring various other rules of thumb that can help people gain a clearer picture of their current situation, and understand the steps they can take to bring their savings habits more closely into line with their retirement expectations.

Paper 1: Risks to staying on track

The first of these follow-up papers looks at the risks people face in the DC environment, all of which might affect their ability to stay on track with their savings. The paper looks at this in the context of pensions adequacy, investment risk and longevity risk. It also suggests a simple rule of thumb that can help savers (particularly those in younger age groups) assess whether they are on track to achieve their goals. This rule of thumb works out what size of DC pot individuals should have accrued to date, in order to be ‘on track’. Later papers will explore the different mechanisms that can help those who are not on track, to mitigate that.


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E.g., 23/09/2020
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Events calendar

  • Asia Conference Webinar Series

    7 September 2020 - 25 September 2020

    Spaces available

    There will be a prestigious line-up of international speakers discussing the insurance and financial industry’s innovation and change in Asia.  The conference will take place throughout September via an online platform. The webinars consist of plenary speaking sessions and a series of workshop sessions including Life, GI, Data Science, Sustainability, Risk Management and Investment.

    This will be the perfect opportunity for you to discover,ask questions and be at the forefront of current and developing actuarial/financial topics and trends in Asia.


  • Spaces available

    This free 90 minute webinar is designed to support the IFoA CPD Co-ordinators, and others, involved in supporting our members to achieve their CPD requirements. 

    The programme will include an overview of the new CPD Scheme; specifically sharing with you key messages to support you implement and embrace the new CPD Scheme for our members within your organisation and regional community; how to arrange a reflective practice discussion; and an interactive reflective practice discussion learning exercise.  In addition, delegates will gain information about accessing, and making the most of the IFoA event Toolkits which you can make use of to run your own in-house events and events for regional communities. 

  • Spaces available

    16.00-17.00 GMT+8

    Consumer expectations are changing Insurance. The Royal Commission in Australia, Design Obligations in the UK, the insurtech ecosystem, and digital-first consumers demanding personalised solutions will all revolutionise how insurance looks like in the future.

  • Spaces available

    12.00-13.00 GMT+8

    This presenter / panel workshop hybrid will be anchored by two presentations examining the socioeconomic, medical and technological factors that will have a significant impact on mortality and our pricing over the next 20 years and beyond. It will also discuss whether significant mortality improvement will continue in Asia or whether varying experience of low improvements or deterioration. 

  • Spaces available

    12.00-13.00 GMT+8

    This presentation aims to provides an overview of the reformation of current Chinese regulatory solvency regime, how industry coping with the new normal after pandemic time and how the reformation of the regulation could help the insurance industry gets back on its feet as well as coming back to the “protection” core value for the policyholders. The presentation would include:

  • Spaces available

    16.00-17.00 (GMT+8) | 09.00-10.00 (BST)

    The basic data of China’s 2nd Critical Illness Mortality Table covers 2000+ products in Chinese market, including about 340 million insurance policies and 5.1 million claimants. Presenter will give the audience a general understanding including but not limited to the following contents:

  • Autumn Lecture 2020: Professor Elroy Dimson

    Online webinar
    14 October 2020

    Spaces available

    Many individuals and institutions have a long-term focus, and invest funds for the benefit of future generations. Their strategy should reflect their long horizon. University endowments are one of the oldest classes of institutional investor, and I will present the first study of the management of these endowments over the very long term.

  • GIRO Conference 2020 Webinar Series

    Available to watch globally in November.
    02-13 November 2020
    Spaces available

    This year's GIRO has been re-designed as a virtual conference to offer members and non-members the opportunity to get up to date content from leading experts in the general insurance field via online webinars. All sessions will be recorded and made available to purchase and re-watch post-event on the IFoA's GI Online Learning Resource area.

  • Spaces available

    Cash-flow driven investing is a game-changer for DB pension funds navigating their end-game. Suitable for sponsors who want to reduce risks on their balance sheets. And for trustees, it shifts the focus to providing greater certainty of returns, managing funding level volatility and ensuring they have enough income to pay cash-flow requirements.

  • Spaces available

    The talk will provide an understanding of the priorities and relationships between deficit reduction contributions, in the context of wider scheme funding, and different types of value outflow from the employer based on the working party’s recently published report.