Research by the Pension Policy Institute suggests that to maintain an adequate standard of living in retirement, we should target a level of retirement income based on earnings before retirement. Higher earners are considered to require a lower proportion of their earnings to maintain their standard of living in retirement, whereas lower earners need to replace a much higher proportion of their earnings with retirement income. The table below shows the suggested ‘Replacement ratio’ for different earnings levels. This simply means retirement income divided by salary at retirement. Please be aware though that the ratios below show the percentage of salary which might be required from ALL sources of income in retirement, not just from the Heinz UK Pension Plan i.e. this includes the UK state pension.

The following is based on a number of assumptions including future fund performance, salary growth and future inflation. To the extent that future market conditions do not match those assumptions, the position will be different in practice.

The Pension Policy Institute suggests the following replacement ratios for members based on different earnings levels: