The average lawyer is at risk of receiving almost £10,000 less annual income than they want in retirement due to a failure to save enough throughout their working lives, according to research by Wesleyan*.
Although lawyers expect to need a retirement income of £36,852 a year to live comfortably in retirement, lawyers are, on average, currently saving enough to receive just £27,539 a year once they finish work – a shortfall of more than £9,300 a year or £186,000 over a twenty-year retirement.
Research by the specialist financial mutual found lawyers are saving an average of £1,042 a month, with almost three quarters (72 per cent) admitting they don’t know how much to save for retirement at all. The average age for lawyers to start saving above and beyond their basic workplace pension is 29-years-old.
However, lawyers who do delay topping up their pension until that age will actually need to save £1,523 a month, or more than £18,000 a year, to achieve their retirement income ambitions.
This late start also means people are failing to learn from the experience of previous generations. Wesleyan’s research also showed not saving enough is one of the biggest financial regret of lawyers, with almost a fifth (17 per cent) wishing they had started to put money aside earlier.
Vicki Wentworth, Chief Customer and Strategy Officer at Wesleyan, said: “Ensuring you have enough money for retirement is the most important savings plan you will ever have, which is why it is crucial you talk to experts and learn from those who have already been through it.
“Our research tells us that failing to save early enough is one of the biggest financial regrets for lawyers, so it’s imperative people start saving earlier to avoid a shock in later life. With the right support, lawyers can start planning ahead to ensure a comfortable transition into retirement.”
The analysis by Wesleyan was supplemented by further research conducted with its own customers to reveal retirement aspirations**. According to a panel of Wesleyan’s customers who said their top three goals in retirement are to stay fit and healthy, travel and to stop work completely.
Yet despite their aspirations to give up work, more than a quarter of the panel (27%) imagine they will have to take part-time jobs as they transition into full retirement.
* Research based on a survey of 100 lawyers by Censuswide on behalf of Wesleyan, conducted in February 2016
** Additional research is based on a panel of 118 of Wesleyan’s customers, conducted in July 2016
*** Full calculations available on request
(Source: Wesleyan)
