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According to work from Prudential, almost one in seven retirees this year will rely on the state pension for income. The current state pension of £115.95 per week and only generates an annual income of £6,000. This is £3,500 short of the Joseph Rowntree Foundation’s adequate income figure of £9,500 per year. This is the figure the foundation believes is needed as minimum for pensioner to live.
These figures were highlighted in the eighth annual study which tracks the plans and aspirations of people planning to retire.
The study also revealed that of those that had additional pension incomes, the state pension made up around a third of their annual income on average.
Confusion Over State Pension
Of the 7,687 respondents who are intending to retire this year, over a third believed the state pension was worth more than it actually was. Around 8% of those surveyed, did not actually know how much the state pension was going to pay them per week.
Gender differences also emerged. Around 21% of women relied on the state pension for income, compared to 9% of men. Women also expected the state pension would account for 41% of their income in retirement, whereas men believed it would account for 31%.
56% of those surveyed had a defined contribution scheme as their main pension. The remaining 44% had variants of a defined scheme.
Vince Simon-Hughes of Prudential said: “Our research shows that the state pension will make up a significant proportion of income for most people – but it is important not to overestimate its value – to secure a comfortable retirement income the best approach remains to save as much as possible as early as possible during your working life.”
Increasing your Retirement Income
Clearly with an annual income of £6,500 per year, the state pension does not provide an adequate source of income on its own. If you do not have good financial planning in place prior to your retirement your quality of life will diminish.
To ensure your future has better prospects, get in touch today. Click here and complete the CALL BACK SERVICE form, and together we can start managing your wealth and retirement. You will have a better future.
Source:
FT Adviser
For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]
