The average retiree may need to save an additional £90,000 into their pension during periods of ‘medium market performance’ to maintain a comfortable retirement over 20 years, according to PensionBee.

Meanwhile, those seeking a more ‘luxurious’ retirement would need to save an additional £140,000 during periods of medium market performance.

In its modelling, PensionBee defined medium market performance as 5 per cent annual growth.

According to the provider’s modelling, the average retiree in 2021 required an annual income of around £19,000 to maintain a comfortable lifestyle, which equates to an overall pot size of £330,000, assuming a 5 per cent annual growth rate and 0.5 per cent fees.

It also assumes that inflation will be 10 per cent in 2022 and 2023, 5 per cent for the five years following that, and 2.5 per cent for the 13 years after that.

However, periods of high market performance, which PensionBee defined as 7 per cent annual growth, would help mitigate the impact of inflation, with the additional savings required to maintain a comfortable retirement over a 20-year retirement falling to £10,000 in this scenario.

In 2021, the average retiree needed an annual income of around £31,000 to maintain a luxurious lifestyle, translating to a pot of £540,000, assuming 5 per cent annual growth and 0.5 per cent fees.

With inflation at 10 per cent, PensionBee estimated that pensioners would need to increase their withdrawal amounts to £21,000 a year for a comfortable retirement and to £34,000 a year for a luxurious lifestyle in 2022.

Commenting on the findings, PensionBee CEO, Romi Savova, said: "Our latest modelling highlights the real impact of yesterday's record inflation levels on pension savers, particularly for those who may already be withdrawing from their pension.

“Despite the alarming numbers, we want to reassure savers that it's possible to increase the value of their pension by following a few simple steps, without needing to increase their contributions at a time when finances are already tight.”

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