Are You Saving Enough to Retire Comfortably?

**Tim Elliott** (0:00)
Your money now at Mira Business FM on the Morning Drive. James Thomas is here. He's a licensed independent financial consultant, all-round financial wizard, and rides a bike at the weekends.

**James Thomas** (0:10)
I do, wizard, I like that.

**Tim Elliott** (0:11)
I thought that was good, yeah. Welcome, nice to see you.

**James Thomas** (0:14)
And you.

**Tim Elliott** (0:15)
So this is today, here's the topic, cost of funding a comfortable retirement in the United Kingdom. I use that, the country advisedly, we've switched things here, but it kind of gives us a really good starting point for a discussion. The point is, a comfortable retirement is now a million pounds sterling. That's five million dirhams, okay, that you need.

**James Thomas** (0:38)
That's a lot of money, isn't it?

**Tim Elliott** (0:39)
It is a huge amount of money. So you need to be a millionaire. Yes. When you retire.

**James Thomas** (0:44)
And that's the headline that grabbed me, and I thought it would make a good topic to explore.

**Tim Elliott** (0:50)
So this is new analysis.

**James Thomas** (0:51)
To literally have a comfortable retirement, you need to be a millionaire.

**Tim Elliott** (0:55)
Okay, so a couple who want to retire at 65 would need a pension part of 1.2 million pounds. That's about 5.5 million dirhams to generate enough income to pay for a retirement with the nice holidays and maybe a new car or two, decent weekly grocery shop, that kind of thing. That's where we are. So the caveat, before we get into this, James, to the UK newspaper article I get that is based on assumptions made from a very sort of UK-centric perspective, fine. But it makes one point really well because I was thinking about this. Who raises a question? And it's a question that requires an answer, and that is, how much do you need to retire? And it's something that you have to, at some point, much as you may not want to, you have to sit down and ask yourself that.

**James Thomas** (1:40)
Well, it's one of the fundamentals of my job, is to ask someone and establish, what is your number?

**Tim Elliott** (1:46)
Yeah.

**James Thomas** (1:47)
And it can be quite a difficult conversation, and often it needs to be approached from the right point of view, because often it's been used, dare I say, misused to generate a number to benefit ourselves.

**Tim Elliott** (2:06)
Benefit the advisor because there are commissions available.

**James Thomas** (2:08)
Because there are commissions available.

**Tim Elliott** (2:09)
All of that, okay.

**James Thomas** (2:10)
However, as this article is proving, and again, that's why I really liked, liked is perhaps not the right word, but I felt it was a good subject to discuss. Because it does actually highlight that that number is probably a lot higher than a lot of people had previously considered they needed to have that comfortable retirement. There's some data from a trade body called Pensions UK that have established what they view is a minimum, a moderate and a comfortable level of retirement. And they have used the comfortable number, used a multiple and produced a number of 1.2 million pounds, 5.5 million dirhams.
And it's just to see, as I say, to discuss that and make people perhaps reconsider what they thought they're, what they needed to have that level of comfortable retirement, because we can sit there and just perhaps be more cautious on that number or so, we'll be fine. But of course, if you don't really think about it, and again, that's the planning aspect, that's where the good financial planner will help you and have this discussion and make you realize and actually be able to bring this independent research to you and show you that actually that number is likely to be a little higher than perhaps you initially thought. When pensions were introduced a hundred years ago or so, maybe 80 years ago, the thought was that you would work until a certain age, and you probably only live for another five or so years.

**Tim Elliott** (3:47)
Well, this is a modern age issue now.

**James Thomas** (3:49)
And so as we have benefits of health care, we're not thankfully having to work down mines, we're not having to work in very hard manual labor. I know some people still are, but the majority of people no longer do that.
When we come to retirement, we're in a much, thankfully, and medical advances, of course, as well, we're in a much better position than perhaps we were, say, those 50, 80, 100 years ago. And therefore, the chances are that our retirement is going to be a lot longer than it would have been at those times as well.