One in eight have made no provision for retirement
Nearly one in eight people retiring this year (12%) have made no provision for their retirement, according to new research from Prudential. This includes 10% who are largely reliant on the State Pension.
For this group, this means starting retirement with an income of £164.35 a week (state pension from April 2018). This is around £1,452 a year below the standard generally considered acceptable for a single pensioner.
This is lower than the figures seen in 2017, which was 14%. As recently as 2008, the figure sat at 23%. However, there is still a notable gender gap. Women are more likely than men to have no retirement savings – 18% will retire without a pension this year compared to just 7% of men. Nevertheless, this is getting better over time.
For the average retiree in Prudential’s ‘Class of 2018’ relies on the state pension for about a third of their income. Of those who have a pension, two fifths (42%) have the majority in a workplace final salary scheme, while one in eight (13%) have their savings in a personal pension.
Stan Russell, retirement income expert at Prudential, said: “The long-term trend for the number of people retiring without a pension is down and that is good news. 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.”
Retiring with no pension 2008 to 2018
How the retirement saving message is hitting home
|People retiring in…||Proportion of retirees with no pension savings
|State Pension as proportion of average retiree’s total income|
Source: Prudential’s Class of…retirement research – 2008 to 2018