The average annual disposable household median income in the UK in 2022 was £32 300 (1)
The average annual household expenditure (excluding housing costs and council tax) in the UK in 2022 was £22 250 (2)
I excluded housing costs and council tax from the expenditure because (i) disposable income is after council tax and (b) housing costs in the ONS’s annual survey only include interest payments on mortgages and housing costs vary so much!
This means the average household has £10050 per annum to pay for housing and save towards their pension.
The average rent in the UK is £868 a month or £10416.
The average mortgage payments in the uK are £759 a month, or £9108.
This means the average renting household has £-34 a year to save based on ordinary average expenditure while the average mortgage paying household has £942 a year to save.
This is bleak news indeed for renting households who have no chance to pay anything towards their pensions IF they spend at an average level!
It’s slightly less bleak for mortgage paying households who could potentially save £7700 if they saved all of that £942 a year compounded at 3% for forty years.
That’s NOT a lot of savings on average for a 40 year working life!
There is SOME room for manoeuvre...
The above expenditure figures include fairly hefty sums on things such as holidays and fancy subscriptions that aren't strictly necessary, so there is scope for the average family to save even several hundred pounds a month towards their pension.
It's just that they'd have to live well below the typical HH expenditure to do so, which wouldn't be a pleasant experience!
We're also lucky to have the state pension in the UK, you'd still be getting at age 145 (or thereabouts) in the UK assuming you or your employer had made up their NI contributions over the years!