One in eight people retiring this year have made no provision for their retirement, including 10% who will either be totally or somewhat reliant on the state pension, according to research from Prudential.
The insurance giant’s Class of 2018 study also showed, however, that the number of those retiring without a pension is now 14% lower than in 2017, and nearly half the 23% level recorded in 2008.
According to Prudential, anyone without pension savings will be left starting their retirement with an annual income that stands some £1,452 below the Joseph Rowntree Foundation’s minimum income standard for a single pensioner.
The 10% of retirees either relying entirely or somewhat on the state pension will have an income of £164.35 a week, or just more than £8,500 a year from April.
The Joseph Rowntree Foundation has suggested £192.27 per week for a single pensioner as a benchmark for the income required to support an ‘acceptable standard of living’, meaning those relying exclusively on the state pension are falling short by £27.92 per week.
Women are more likely to have no retirement savings – nearly a fifth (18%) will retire without a pension this year compared with 7% of men. The gap is narrowing over time, however, the research suggests – in 2016, 22% of women had no retirement savings compared with 7% of men, and in 2008 almost a third (32%) were planning to retire without a pension.
According to the research, of those retiring in 2018 who do have a pension of their own, two-fifths (42%) have the majority of their pension in a workplace final salary scheme, 13% have their savings in a personal pension not through their employer and 12% have the majority in a workplace defined contribution scheme.
Prudential retirement income expert Stan Russell 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.”