With 82 per cent of people aged 18 to 64 years old in Scotland saying they were not sure or did not know where to look to tell if they were on track with their retirement savings, the Pensions and Lifetime Savings Association (PLSA) has launched a major new consultation designed to help people define and meet their retirement goals.

Hitting the Target – Delivering Better Retirement Outcomes seeks to consult on the development of a set of new national retirement income targets and to look at what changes to the current retirement saving system would make this possible. The PLSA will also be engaging with UK government as part of the process.

Identifying how much you need to save for retirement is a significant challenge for most people, with only 14 per cent saying they know much they would need to achieve the standard of living they hope for in retirement. Just under half (40 per cent) of Scots who said they knew how much they need to save said they had come to this conclusion by themselves, which the PLSA says demonstrates that a more evidence-based national model is needed.

National Retirement Income Targets (RITs) – which are currently used successfully in Australia – provide savers with tangible income goals which take into account what they need to save in order to achieve different standards of living in retirement (minimum, modest and comfortable).

This will address one of the key challenges facing savers as there is currently no widely accepted and generally understood target for retirement income and more than three quarters (81 per cent) of people in Scotland admit that do not know how much they need in later life. Four out of five people (80 per cent) said that a national retirement income target would help them plan for retirement.

As part of the consultation further in-depth analysis will be undertaken to determine exact income levels including regional variations and the PLSA welcomes views from interested parties. However, as part of this initial research, consumers were asked for their views and those between 55 and 64 years old – who are arguably most likely to be knowledgeable - suggested that for a single person they might be minimum (£10,000 to less than £15,000), modest (£15,000 - £25,000) and comfortable (more than £25,000).

Graham Vidler, PLSA director of external affairs, said: “As with other regions, people in Scotland know they need to save for retirement but across the UK few of us know how much we might need to live on or whether we are on track to hit that target. The PLSA will be consulting widely to understand how the industry and Government can help people build and reach a retirement plan.

“As part of this, we are asking difficult questions which need to be answered to help more people make the right choices around retirement. We are also looking to develop a new set of Retirement Income Targets that will empower savers by providing tangible targets for them to achieve. We look forward to working closely with stakeholders to build a retirement savings market which is truly focused on the end users – savers.”

Mr Vidler added: “Savers will need support as they work to achieve the Retirement Income Targets and we need to consider what might need to change within the UK retirement and savings market to facilitate this step forward. Our report sets out some of the changes we think are necessary but we want everyone with an interest in the nation’s retirement future to respond - challenging, improving and building on our proposals.”