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27 Apr 2016

One in seven 2016 retirees have no personal savings

A new survey has revealed that a worrying one in seven people due to retire this year have no personal savings pot, and will be relying either heavily or totally on their state pension payments, AOL Money reports.

According to the study by Prudential, women retiring this year are three times more likely than men to have made no financial provisions for their retirement. Nearly a quarter (22%) of women will be fully relying on the state pension, compared to just 7% of men.

Taking both genders into account, the report found that 14% of the 1,000 people surveyed had not accrued any personal savings in preparation for their retirement, making them fully dependent on the state during their retirement years.

Looking at regional differences, those due to retire in Wales this year were found most likely to be relying on the state pension or other savings, with nearly one in five (19%) having no other pension in place. This was followed by the East Midlands and the East, both with a respective 17%. Retirees living in London are set to be the least reliant on the state, with just 8% having no pension savings.

Overall, those questioned estimated that the state pension would account for just over a third (35%) of their retirement income; this was slightly higher for women (41%) than men (31%).

The single-tier rate pension was introduced on April 6 this year. Most people will need to have made at least 10 years of eligible National Insurance (NI) contributions to qualify, and 35 years if they are to get the full amount.

Prudential noted that a new retiree whose sole income is the new flat-rate state pension will bring in just £155.65 per week, or £8,100 over the course of a year. Its retirement income expert, Vince Smith-Hughes, advised that “Someone expecting to live in any degree of comfort needs to have made some sort of pension provision of their own.”

Copyright M2 Bespoke 2016

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