‘DINK’ couples could double retirement savings – Standard Life

Standard Life, part of Phoenix Group, has revealed that those who consider funnelling more of their money into their pension pots could boost their retirement prospects, even if they decide to have children later in life.

‘Dual Income, No Kids’ (DINK) couples are a continuing social phenomenon, with the UK’s fertility rate recently hitting a record low of 1.44 children per woman, while the average cost of raising a child to age 18 has hit £166,000.

Standard Life found that someone who began working full-time with a salary of £25,000 per year and paid the minimum auto-enrolment contributions (5% employee, 3% employer) from the age of 22, could amass a total retirement fund of £208,000 in today’s prices by the age of 68, the expected state pension age for people born after 1977.

However, assuming an even split across 18 years, the £166,000 cost of raising a child over 18 years worked out as £9,222 a year.

Standard Life calculations found that if someone directed that additional £9,222 a year into their pension for 18 years, they could add £226,000 adjusted for inflation to their pension, potentially amassing a total fund of £434,000 – more than double the value. 

DINKs who put £4,611 into their pension could add £113,000 to their retirement fund in today’s prices, potentially building a pot of £321,000 at the age of 68.

These figures all allow for 2% inflation.

Dean Butler, managing director for customer at Standard Life, said: “There are a number of reasons why many people are choosing to have fewer children, or to not have them at all, including the rising cost of living and the cost of housing in the UK.