Up to 12% of people retiring in 2018 have not made any financial provision for their retirement, according to fresh research from Prudential. This figure includes 10% who will be reliant on the state pension to support them throughout their retirement.
Consequently, these individuals will be starting their retirement on £1,452 a year less than the minimum income standard for a single pensioner laid down by the Joseph Rowntree Foundation.
The organisation that campaigns for social change says that a single pensioner needs an income of at least £192.27 a week to have an acceptable standard of living in retirement.
A pensioner retiring after 6 April this year would have a maximum weekly state pension of £164.35 a week or just over £8,500 a year.
Women were more than twice as likely to be retiring without adequate private provision, with 18% of women having no company or private pension, compared to 7% of men.
Stan Russell, retirement income expert 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.”
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