More than a third (35 per cent) of people planning to retire in the UK this year will do so with incomes below the poverty line according to new research from Prudential.
To meet its minimum income standard the Joseph Rowntree Foundation estimates that a single person in the UK needs at least £14,400 a year, yet 35 per cent of those retiring in 2011 will retire with an income below this level, up from 32 per cent in 2010.
Prudential’s Class of 2011 study surveyed people intending to retire this year and also revealed that nearly one in five (19 per cent) will retire on an annual income of less than £10,000 a year.
Women planning to retire this year are even more likely to have incomes below the poverty line. 40 per cent of women retiring in 2011 will have a pension income of less than £14,400 compared with 30 per cent of men. Prudential’s research also found that a quarter (26 per cent) of women compared with 12 per cent of men will retire this year with less than £10,000 a year to live on.
Vince Smith-Hughes, Head of Business Development at Prudential said: “Although our research shows that increasing numbers of those planning to retire will face tough financial decisions, there are many options available to boost retirement income.
“People approaching retirement should seek professional financial advice as a prerequisite to maximising their income. We would recommend that you review your finances with an adviser annually in the years immediately before your planned retirement.
“Following the simple advice to start saving as much as you can as early as you can should help to secure the retirement income you want and need. Making voluntary National Insurance contributions should also help to boost retirement income for people who have had breaks in National Insurance payment during their working lives.”
Prudential’s Class of 2011 research also found that those planning to retire in Wales and south east England this year are most likely to face retirement poverty. 42 per cent of this year’s planned retirees in Wales will do so with an income below the poverty line with 27 per cent expecting an income of less than £10,000. In the south east of England two-fifths (39 percent) of those planning retirement in 2011 will do so with incomes below the poverty line and a quarter expect to live on less than £10,000 a year.
– More than a third of those retiring in 2011 below poverty line
– One in five will retire on less than £10,000 a year
– Women more likely to face pension poverty than men
Source : Prudential Press Release
