Recently Prudential released figures in regards to pensioners that are quite alarming. According to their data, one out of every six people reaching retirement this year will be relying solely on Government to survive as they have no pension from their place of employment. The report further states that the average person retiring in Britain will rely on one-third of their income from Government.
In order to make this assessment, Prudential gathered data on approximately 10,000 retirement plans in the UK. They found that women are least likely to have workplace pensions or private pensions and in fact, 20% of women retiring within the coming year will only have their state pension to rely on. This is in contrast to men of which only 8% will need to rely solely on state pensions.
Actually, Prudential found that the average retiree this year will be looking to their state pensions to provide approximately 34% of what they need whilst the remainder will come from investments, savings and private pension funds. Even though there will be a £5.30 rise in state pensions as of 6 April that only brings the total to £107.45 per single person per week.
Prudential gave a stark warning that this should not be seen as a ‘safety net’ and that retirees without savings will live in relatively low income. It will be a real shock when retirees actually are reduced to their pensions after having brought home an income for so many years as the gap between the two is huge.
Because the average worker isn’t aware of just how severely their budgets will be affected without adequate pensions, as many as ten million Britons will automatically be enrolled in pensions in the workplace at some point later in the year. This, in the words of the Pensions Minister, will provide a boost to the level of income retirees are now missing out on.