Halving socialising spend could boost retirement pot by £173,000, research finds

Research from Standard Life found UK adults spent an average of £375 a month on socialising, with one in six (16%) spending more than last year. 

Nearly half (46%) of adults regretted money spent on social activities, with expensive nights out (32%), eating out (29%) and drinks (25%) topping the list. 

A third (31%) said social spending held them back from saving for the future.

Analysis from Standard Life showed that someone working full-time from age 22 on a £25,000 salary, paying minimum auto-enrolment pension contributions, could have a retirement fund of £210,000 by age 68. 

If half of yearly socialising spend (£2,250) was redirected into a pension, the fund could reach £383,000 – an increase of £173,000. 

The figures allowed for 2% inflation, 3.5% salary growth, 5% investment growth and a 0.75% annual management charge.

Research found that even putting 10% of the £4,500 yearly socialising spend (£450) into pension savings could result in a final pension pot of £244,000, a boost of £34,000. 

Redirecting 30% (£1,350) could add £104,000 more.

Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group, said: “January is often when people take stock and set new goals, so it’s a great time to think about balance. 

“Spending time with friends is one of life’s great joys, and it’s not something people should feel pressured to give up. 

“But as our research shows, many people do look back and regret certain socialising costs – whether it’s an overpriced dinner or a night out that didn’t feel worth it.”

Ambery added: “The emotional value of friendship and connection can be huge – it’s what keeps many of us grounded, supported and happy. 

“The key is finding a balance that works for you. Prioritising spending on the things you really want to do, and considering redirecting even a small amount of the money you would have spent on the rest into your long-term savings, can have a powerful impact over time. 

“With most UK adults currently under-saving for retirement, it’s worth considering where small changes could help build a more secure financial future.”