6
Understanding your pension gap
Before investing a huge amount of time and effort in tackling your pensions crisis, you might want to work out how big your own pension gap is. For most people, doing a very rough calculation is probably sufficient to get an idea of the scale of the gap and therefore the scale of the action that needs to be taken.
Your pension gap
To start thinking about the actions you might want to take, it’s useful to get a rough idea of the size of your pension gap. Conceptually this is a fairly easy calculation:
- work out what you will need in retirement;
- work out how much you will actually get from all the available sources;
- calculate the difference.
In practice, the calculation can get very messy – and a full detailed analysis ...
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