Pensioners expect the highest income since 2008 crash

PEOPLE retiring this year have the highest typical expectations for their incomes in at least a decade, a report has found.

On average, those retiring in 2018 expect to have an income of £19,900 a year – the highest figure since the research from Prudential started a decade ago.

The “class of 2018” anticipates having an average income which is 10 per cent higher than those who ended their working lives in 2017, whose average expected annual retirement income was £18,100.

Expected retirement incomes are now £1,200 higher than the £18,700 people retiring in 2008 were anticipating.

The report found expected retirement incomes have been on the increase each year since 2013, when they hit a low of £15,300. A pensions revolution has taken place since 2008, with the launch of automatic enrolment into workplace pensions in 2012 and more recently the pension freedoms for over-55s, meaning people are no longer required to buy an annuity when they retire.

But “gold-plated” final salary pension schemes which promise a certain level of income have also become more scarce in recent years.

The research found that despite the anticipated income boost, only half believe their expected income will enable them to retire comfortably.

Vince Smith-Hughes, a retirement income expert at Prudential, said: “The new record high is good news for people planning to retire this year, highlighting how saving for the future is paying off.

“The 10 per cent rise from last year is even more impressive given the economic and political uncertainty.”