12% of people retiring this year have made no provision for their retirement, including 10% who will either be totally or somewhat reliant on the State Pension, according to new research from Prudential.
This leaves them starting their retirement with an income of around £1,452 a year below the Joseph Rowntree Foundation’s (JRF) Minimum Income Standard for a single pensioner.
The findings are part of Prudential’s annual study – now in its 11th year – which tracks the finances, future plans and aspirations of people planning to retire in the year ahead.
The numbers retiring without a pension is lower than the 14% in 2017 and now nearly half the 23% recorded in 2008. Women are more likely to have no retirement savings – 18% will retire without a pension this year compared with 7% of men. The gap is narrowing over time – in 2016, 22% of women had no retirement savings compared with 7% of men. While in 2008, the year the research began, 32% of women were planning to retire without a pension.
10% of those retiring in 2018 will either rely somewhat or solely on the State Pension, which for those retiring after April will mean an income of £164.35 a week, or just over £8,500 a year. Taking the JRF’s Minimum Income Standard of £192.27 a week for a single pensioner, which is a benchmark of the income required to support an acceptable standard of living, those relying on the State Pension will fall short of the minimum standard by £27.92 a week, or £1,452 a year.
Stan Russell, retirement income specialist at Prudential, said: “The long-term trend for the number of people retiring without a pension is down and that is good news. But there is still some distance to go and it is worrying so many people will be entirely reliant on the State Pension for their income in retirement.
“While the State Pension is an important part of retirement income, it shouldn’t be the only part and those still in work should if at all possible be contributing to a pension and saving towards their retirement. It is never too early to start saving into a pension and even a small amount each month can make a difference and help from a professional financial adviser can be invaluable in helping plan for retirement.”
