Retirement poverty looms for many
The typical UK household will experience a near 60% fall in income at retirement, according to new research from fund manager Fidelity International.
The Fidelity Retirement Index, based on data from public and private sources, indicates that the pension savings and State benefit entitlements of UK workers will, on current trends, replace only 42% of their expected final salary.
For someone retiring on today’s average annual earnings of £22,900 this would mean a retirement income of £9,618, or £185 a week before tax. This is less than the weekly earnings of someone on the minimum wage who works 40 hours a week.
“These figures make depressing reading and show just what a mess our pension system is in compared to some of our European counterparts,” said financial expert Martin Cunningham.
“I don’t know anyone who can afford a 60% cut in their income overnight and a lot of people are in for a miserable retirement I’m afraid.”