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Are we saving too much?

One clue that this might be the case comes from a recent study by the Institute for Fiscal Studies of people between the age of 50 and the state retirement age. They estimate that half of these people are on course to have an income in retirement of 81 per cent or more of their current income, even considering only their state and private pensions. Even on this narrow idea of retirement income, one-third are on target to have higher incomes in retirement than they have now.

Taking into account non-pension savings - which is surely reasonable as many of us regard our Isas as a form of pension provision - 58 per cent will have a retirement income within 80 per cent of current income. Adding in half of housing wealth and expected inheritances, 78 per cent will have such an income, with only 12 per cent on course for an income of less than two-thirds their current income.

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