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It was concerning to hear that as many as one in eight people (12%) due to retire this year have made no provision for their retirement, including 10% who will either be totally or somewhat reliant on the State Pension.
As a result, they will be starting their retirement with an income of around £1,452 a year below the Joseph Rowntree Foundation’s Minimum Income Standard for a single pensioner.
This is the finding of an annual study by Prudential, which tracks the finances, future plans and aspirations of people planning to retire in the year ahead.
On a more positive note, however, the numbers retiring without a pension this year are lower than the 14% in 2017 and now nearly half the 23% per cent recorded in 2008.
The study found that women are more likely to have no retirement savings – 18% will retire without a pension this year compared with 7% of men. The gap is narrowing over time, however. In 2016, 22% of women had no retirement savings compared with 7% of men, while in 2008, the year Prudential first conducted the research, 32% of women were planning to retire without a pension.
“The long-term trend for the number of people retiring without a pension is down and that is good news,” commented Stan Russell, retirement income expert at Prudential. “But there is still some distance to go and it is worrying so many people will be entirely reliant on the State Pension for their income in retirement.”
“While the State Pension is an important part of retirement income, it shouldn’t be the only part and those still in work should if at all possible be contributing to a pension and saving towards their retirement. It is never too early to start saving into a pension and even a small amount each month can make a difference and help from a professional financial adviser can be invaluable in helping plan for retirement.”
To speak to a member of our expert team about personal or business financial concerns, contact us today. We aim to ensure that you are satisfied with everything we discuss with you, and the decisions you make.
