People who are retiring this year who do not have savings will be relying on state pensions
One in seven people (14 per cent) due to retire in 2017 admit to having no workplace or personal retirement pot and 11 per cent of those retiring in 2017 expect to be totally or somewhat reliant on the state pension in old age.
A worker retiring after 6 April 2017 and relying solely on the new flat-rate State Pension, would have a weekly income of £159.553, or nearly £8,300 a year – falling short of the Joseph Rowntree Foundation’s minimum standard by £27.22 a week or over £1,400 a year.
The JRF’s Minimum Income Standard for a single pensioner of £186.77 a week is a benchmark of the income required to support an acceptable standard of living in retirement.
On average, people retiring this year estimate that the state pension will account for more than a third (35 per cent) of their income in retirement.
One in seven people due to retire in 2017 admit to having no workplace or personal retirement pot
More than two-fifths (42 per cent) of those retiring this year who have their own pension hold the majority of their savings in a workplace final salary pension scheme.
These schemes are often described as “gold plated” as they promise savers a certain level of income when they retire – but they are becoming increasingly rare as companies find them expensive to run.
It is important to try to save as much as you can from as early as you can
Stan Russell, a retirement income expert at Prudential, said: “People throughout their working lives should be doing everything they can to ensure that they are entitled to the full amount of state pension, including making voluntary National Insurance contributions to cover any missing years.
“However, for many working people the state pension will always be viewed as just one aspect of retirement planning.
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"It is therefore concerning that some pensioners who are due to retire this year will rely solely on the state pension and will face retirement incomes of £1,400 below the Joseph Rowntree Foundation’s minimum level required to live comfortably.
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“While saving is not always easy, especially when the multitude of costs in everyday life get in the way, it is important to try to save as much as you can from as early as you can, to help to avoid financial struggles during retirement.”
There was better news for women.
Nine per cent of men retiring this year will not have a private pension
The survey of 1,000 people heading into retirement this year suggests women are more likely to have made some private pension provision than female colleagues retiring a year ago.
Nearly one in five (19 per cent) will be doing so without a private pension, compared with 22 per cent who said the same in 2016.
Meanwhile, nine per cent of men retiring this year will not have a private pension – a slightly higher figure than the seven per cent who said this when similar research was carried out in 2016.