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One in seven will retire with no private pension

Joanna Faith
Written By:
Joanna Faith

More than one in seven people due to retire this year have no private pension savings and will rely totally on the state for their income, according to Prudential.


The insurer found that one in six will retire with an annual income of less than £9,500 – the minimum income standard for a single pensioner defined by poverty group the Joseph Rowntree Foundation.

Even retirees with other forms of pension savings will still rely heavily on the state, with the state pension on average making up 36% of a 2015 retiree’s income.

Women are twice as likely to have to rely on the state pension or other savings – 21% of women say they have no pension savings compared with nine per cent of men.

Those expecting to retire this year in the East and North West of England are the most likely to have to rely on the state pension or other savings – 19% and 18% respectively have no other pension.

By contrast, those in Yorkshire and the Humber will be the least reliant on the state, with just 11% entering retirement without any pension savings.

Vince Smith-Hughes, retirement income expert at Prudential, said: “The reforms to the ways that people can use their pension savings, that came into effect in early April, present retirees with many new choices. However, only those with their own pension savings will be able to benefit from the new choices, while people who rely solely on the state pension are likely to have to face serious financial belt-tightening when they give up work.”