Most people in their 50s may not have sufficient pension savings to fund a comfortable retirement, according to research and analysis by over 50s finance experts Sunlife.

Average 55-year old needs to put £531 in their pension each month to reach level needed for a moderately comfortable retirement.

People in their 50s have seen homes increase in value by £133,000 on average so equity release could offer a solution for homeowners with insufficient pensions savings

SunLife studied the finances of 3,000 over 50s and found that 21% of people in their 50s currently don’t have any private pension savings. The 79% that do, have an average pension pot of £146,666.

According to The Pensions and Lifetime Savings Association (PLSA) to enjoy a moderately comfortable retirement (basic expenditure and some luxuries such as a European holiday) you would need to have £20,200 a year.

Simon Stanney, equity release, marketing director at SunLife said: “According to our research, just 9% of people in their 50s are confident they have enough in savings, investments and pensions to fund their retirement; a further 32% say they ‘hopefully’ have enough with a 36% saying they definitely don’t. A further 15% say they are not sure.

“Homeowners over 55 could release some of that money – equity – tied up in their home with equity release. It’s tax free, there’s no need to downsize and the money can be used however they wish, so could help make their retirement more comfortable.”

“Obviously the average over 50s’ pension pot is not yet mature, and many over 50s will reach their target by the time they retire, but for others, especially those nearing retirement age, the amount they need to save each month is quite substantial if they are to build up a big enough pot to retire ‘comfortably’.”

But, says Stanney, for those over 50s that own their own home, there is another option.

“Homeowners over 55 could release some of that money – equity – tied up in their home with equity release. It’s tax free, there’s no need to downsize and the money can be used however they wish, so could help make their retirement more comfortable.”

How to plan for retirement?

Philip Wise, retirement income planning director at Informed Choice, and chartered financial planner says in his blog: “While a lot of expenses will go down, some, like travel and other leisure activities, will go up. Depending on what you enjoy doing, this can end up being a significant portion of your budget in retirement.

If you want to work out a realistic spending rate in retirement, look closely at your financial situation and your desired lifestyle. If you’re going to spend a month travelling in South America every year, you’ll want to budget for a higher spending rate than if you spend a few days in a B&B on the Isle of Wight.

Wise adds: “As retirement approaches, a more personal and scientific method becomes necessary. A good alternative approach is to make two lists — one list of the things you want to accomplish in retirement; and another of the things you are afraid of in retirement. Those two lists will put you on the path to working out how much you will need every year in retirement, which is one of the foundations of a solid retirement plan.”