Britons’ expectations of income in retirement are down on what they were two years ago, according to latest research.
The average person now expects needing £18,000 per annum, just £2,400 above the minimum income standard. In 2010, income expectations overshot the minimum income standard by £13,548.
The study by CoreData Research finds that in 2010, people expected to need £2,329 per month net of tax while in 2012 this monthly income prospect dropped to £1,503 per month.
According to the Joseph Rowntree Foundation, in 2010, the minimum income standard for a single person in the UK was £14,400. This would allow for the coverage of the bare necessities meaning two years ago, people were still living in ope of more luxury with a forecast of practically double that income per month – £2,329 compared to the £1,200 needed to cover necessities.
Since then however income assumptions have come down drastically and individuals now only expect to have around £200 more than they need to cover their essential costs of living during their retirement.
“The drastic drop in the forecasts of how much money people think they will need suggests that the days of overblown extravagance are over and people can be considered to be now more realistic about the lifestyle they will be able to afford in retirement,” said Craig Phillips, principal, CoreData Research UK.
However, individuals under the age of 30 think that on average, they can get by on £1,233 per month once they retire. This, in today’s monetary terms, will in reality not be sufficient to cover their expenses.
Individuals over the age of 30 and under 60 on the other hand expect to have between £1,400 and £1,500 per month to live on while those on the very of retirement believe they will have around £1,700 to hand every month.
This data was drawn from the CoreData Research Pensions and Retirement 2012 Report. The study includes responses from 1,507 consumers in Britain.
Phillips added: “One can argue that the people who are at retirement’s door have a clear idea of how much money they will actually have once they leave the workforce and this figure, though higher than younger people’s expectations is still just £400 a month above the minimum they need to cover basic costs.”
