One eighth of the people due to retire in 2018 have made no provisions for their retirement, while one in ten will be either totally or somewhat reliant on the State Pension.
And according to new research from Prudential, women are more than twice as likely to be retiring without pension savings, with 18 per cent expecting to rely on the State Pension, compared with seven per cent of men.
Prudential has warned that the current State Pension is just £164.35 a week, which is lower than the Joseph Rowntree Foundation’s Minimum Income Standard of £192.27 a week for a single pensioner. This means that retirees who do not have any private savings may struggle to make ends meet.
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“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,” said Stan Russell, a retirement income expert at Prudential.
“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.”
However, there was some good news in the Prudential study, as it was revealed that the number of people retiring without a pension is falling. In 2008, 23 per cent of people who were due to retire were doing so without personal savings, compared with 12 per cent in 2018.
However, the gender gap is not yet narrowing, with women being twice as likely as men to retire without savings from 2008 until the present day.
The study also found that the average retiree expects the State Pension to make up approximately one third of their retirement, a slight decrease on last year’s figures.
Among those who are retiring with a private pension in 2018, 42 per cent have the majority of their pension in a workplace final salary scheme, 13 per cent have their savings in a personal pension, and 12 per cent have the majority in a workplace defined contribution scheme.
“The long-term trend for the number of people retiring without a pension is down and that is good news,” added Russell. “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.”