Average worker to retire on less than the minimum wage
The typical UK worker faces a 60% cut in income when they retire, the Fidelity Retirement Index has found.
The Fidelity Retirement Index revealed that the pension savings and state benefit entitlements of UK workers will replace just 42% of their expected final salary.
For someone retiring on today’s average annual earnings of £22,9004, this would mean a retirement income of £185 per week pre-tax. That’s less than the weekly earnings of someone on the minimum wage who works 40 hours per week.
Simon Fraser, president of institutional business at Fidelity International, comments: “On current trends, our research indicates that the typical UK worker is facing a near 60 per cent cut in income when they reach retirement. Unless workers, employers, the financial services industry and the Government pull together to find a solution, we could have almost an entire generation of retirees living off meagre state benefits.
“We all know that more people have to save more. But we also must acknowledge that the industry and Government can do more to help people to save not just more, but to save in the right way. “