Many of the UK citizens this year have not planned any benevolent personal pensions for their retirement which indirectly means one in seven people in UK will be reliant on the state pension.
May 15, 2014 (Newswire) - Many of the UK citizens this year have not planned any benevolent personal pensions for their retirement which indirectly means one in seven people in UK will be reliant on the state pension.
Prudential has not revealed the numbers regarding the imminent plans of people who are planning to retire this year, in their annual 'Class of' study.
Vince Smith-Hughes, a retirement expert from the Prudential said: "The changes to pensions and how people can take their retirement income announced in the Budget last month will provide savers and retirees with more choices. However they don't alter the fundamental fact that many people are not saving enough for a comfortable retirement."
Women three times as likely to have no pension savings
It looks like women are not much bothered to have the pension savings for their retirement when compared to men. As per the survey, it was shown that 20% of women in total have no pension savings for when they retire in comparison to 7% of men.
As per the survey, it's clear that mainly women are more reliant on the state pension than men. As in comparison to 28% for men, the state pension accounts for 42% of expected retirement income for the average woman. Additionally, women's income from company pension schemes are generally less than men as this accounts for 27% of their expected retirement income, in comparison to 42% for men.
Almost 1 in 5 will receive less than the 'Minimum Income Standard'
It looks like there is a bit of confusion over how much people would receive from their state pension this year which makes it clear to some extent that most of the people who are planning to retire are ignorant that they would be receiving very less amount in the form of pension this year.
As per the analysis, 18% of those planning to retire this year will receive an income below the 'Minimum Income Standard' of £8,600 a year for a single pensioner, or £12,500 a year for a retired couple.
However, two in five (39%) of those planning to retire are completely unaware what the State Pension is worth, or believe it is worth more that the £113.10 a week a retiree will currently receive. Of the respondents to the questionnaire, 17% overestimated the value of the State Pension by a minimum of £880 a year.
Vince Smith-Hughes outlined the importance of not overestimating your retirement income by stating: "It is also important to avoid falling into the trap of overestimating the contribution that the State will make to your retirement income, as the State Pension alone is barely sufficient."
He continue to say: "The introduction of auto-enrolment into workplace pension schemes is helping to encourage saving, and along with plans for a flat rate State Pension from 2016, small steps are being taken to improve retirees' prospects. However, simply saving as much as possible as early as possible in your working life and seeking professional financial advice in the run up to retirement will help to make the most of your savings when you're ready to stop working."
Source : http://www.financialadvice.co.uk/news/pensions/20140409/one-in-seven-to-retire-without-a-pension.html
Submitted by : www.scottishpensionadvisers.co.uk