How much do you need to save for retirement?

The reality is that there is no simple answer to the question "How much do I need to save for retirement?" Retirement looks very different to different people.

Some will want to spend their time travelling the world while others want to spend more time in the garden or with their grandchildren. This means that the amounts people need to save can differ hugely.

Measures have been introduced to try and give people an idea of what their retirement is likely to cost. The Pensions and Lifetime Savings Association (PLSA) developed their Retirement Income Standards which seeks to put a cost on a minimum, moderate and comfortable retirement. They offer a good rule of thumb for what you need to be aiming for, but you do need to dig beneath the surface.

Their most recent data put the cost of a moderate retirement at £31,300 per year for a single person and £43,100 for a couple. This is meant to cover all your basics as well as money set aside for things like a European holiday and to run a car.

These figures are quite a hike from the previous year. This accounts for a change in methodology whereby more aspirational things such as extra time spent with family on day trips were included following the pandemic.

Read more: How to get the most from an annuity in retirement

The reality is that many people live well on far less than this. These figures are also after tax so that would need to be added.

Recent data from Hargreaves Lansdown’s Savings and Resilience Barometer put the cost of a moderate retirement at £25,000 for a single person and just over £38,000 for a couple. This is much lower than the PLSA figures and accounts for inflation increasing by 7.3% over the course of the year. Whether you agree with any of these figures or not it starts the all-important conversation around what you want for retirement and how much is it likely to cost.

The earlier you can start thinking about this the better. A good place to start would be making sure you’ve got access to all of your pensions from previous jobs, so you have an idea of just how much money you have as well as getting a State Pension forecast.

If you think you’ve lost track of a pension, then contact the government’s Pension Tracing Service to see if you can track it down. You will need either the name of the company you worked for or the pension provider. The service can’t tell you if you have a pension but it can give you contact details so you can find out.

Once you’ve tracked down your lost pensions it might make sense to consolidate them into a SIPP or personal pension. Having an overarching view of what you have can help cut down on cost and admin and can lead to better decision making.

Read more: How to make sure you don’t get underpaid when it comes to state pension

However, make sure that you aren’t incurring exit fees or missing out on important benefits such as guaranteed annuity rates by consolidating.

Once you know what you have you can use online calculators to get a sense of how much you are set to receive. These will often allow you to model the impact of potentially boosting your contributions on your overall pension and can give a sense of whether you are on track or not.

If you are then it can give you important peace of mind, and if not you have the time to do something about it. Checking in on how your pensions are performing periodically can give you confidence that you will get the retirement you had planned for.

Download the Yahoo Finance app, available for Apple and Android.