Eight in ten face bleak re­tire­ment

Daily Mail - - Money Mail - j.salmon@dai­ly­mail.co.uk

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.

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