Eight in ten face bleak retirement
MILLIONS of over-50s are on a ‘collision course with an impoverished retirement’, with almost eight in ten set to receive an annual income of just £8,000.
Research by pensions specialist Partnership paints a bleak picture of the future facing most of us when we retire. Some nine in ten of those retiring over the past five years had pension savings of less than £50,000. Eight in ten (77pc) had less than £30,000 savings.
Based on current pension payouts, a £30,000 pot would buy an annual income of just £2,000 from an annuity. Add this to a state pension of £6,000 a year, including earnings-related top-ups, and you have an annual income of just £8,000.
With the average wage currently about £26,000, this drastic reduction in income will come as a shock to most.
Philip Brown, from Partnership, says: ‘Millions of people are on a collision course with an impoverished retirement because they aren’t saving enough. These figures show the burden on the already heavily stretched State is going to be massive.’
Only four in ten savers shop around for the best annuity when they retire, missing out on thousands of pounds during their lifetime. And millions of savers in ill health are missing out on an enhanced annuity which would provide a crucial boost to their retirement income.
The research combines figures from the Association of British Insurers, Oxford Economics and the Office for National Statistics.