In England The answer also
appears to be No
One in seven people retiring this year
have no personal pension savings and will have to fall back on the state
pension and other types of support in their old age, new research reveals.
The full state pension is currently
£6,000 a year if you have made enough contributions and pension credits will
top this up £7,860, but beyond this people will probably have to use up other
savings, depend on family, or continue working to boost their income.
According to Moneywise almost
12 million people are failing to save enough for their retirement, the
government has warned. In a wide-ranging new report on pensions, it says 11.9
million individuals are "saving too little", but could get back on
the right track with only "modest changes".
Pensions minister Steve Webb said that,
of the 11.9 million, almost half are at least 80% of the way towards achieving
their retirement income target, while only 8% are less than 50% of the way
there.
"While the state will always
provide a decent safety net so people can get by, anyone wanting to see their
standard of living maintained into old age needs to make their own provision
too," Webb explained.
"This new research shows that by
saving just a little more, a huge number of working people could make their
future retirement so much more comfortable."
Webb said that people are under-saving
due to three main reasons. Some do not have a full work history, meaning they
miss out on years' worth of contributions to workplace pensions as well
as National
Insurance contributions that count towards the State pension.
Many people fail to contribute to
private pensions while they are in work, and those that do are not saving
enough in private pensions.
Women are more likely than men to have
no personal pension, with 21 per cent failing to save into a private or work
scheme compared with 9 per cent of men, according to a Prudential survey of
people retiring this year.
Women's anticipated life span will increase
to 87.6 years and men's to 85.7 years for people living in England and Wales in
2030, according to research by Imperial College London. That's longer by one
year for women and 2.4 years for men than Office for National Statistics
projections for the same year.
Some 44 per cent of people retiring this year are in much less lavish defined contribution pension schemes, which take cash from employers and workers and invest it to provide a pot of money at retirement. This can then be used to generate an income, usually from either an annuity or an invest-and-draw down scheme.
Prudential found that despite the large
number of people retiring with no pension, 54 per cent of this year’s retirees
feel financially well prepared, up from 47 per cent in 2014. Some 50 per cent
of women feel well-prepared compared with 59 per cent of men.
Meanwhile, women anticipate the state
pension will account for 41 per cent of their expected retirement income
compared with 31 per cent for men.
Vince Smith-Hughes, retirement income
expert at Prudential, said: 'The reforms to the ways that people can use their
pension savings, that came into effect in early April, present retirees with
many new choices.
'However, only those with their own
pension savings will be able to benefit from the new choices, while people who
rely solely on the state pension are likely to have to face serious financial
belt-tightening when they give up work.
'For many people reaching the retirement
milestone this year, their income will come from a number of sources. Our
research shows that the state pension will make up a significant proportion of
income for most people – but it is important not to overestimate its value.
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