The State of Retirement Report which questioned 1559 UK adults over the age of fifty, has found that roughly 6.25 million people aged over fifty will rely solely on the state pension when the retire, because they have not saved.
At present 1.2 million people live solely on the state pension, with the average state pension currently being £9,672 a year when additional benefit income such as the additional state pension and the pensions credit is taken into account.
However, these figures are said to be well below the current minimum wage, and even if the government push ahead with plans to introduce a universal flat-rate state pension, which would be a weekly payment of roughly £140, the total state pension is said to still be under the minimum wage level.
A spokesperson behind the report, has said: “It is worrying that so many people are saving little or nothing for their retirement 'wages', instead expecting to fall back on the state pension.
“While working hard up to their retirement to bring home a decent wage, I'm sure many will be disappointed to retire with an income equivalent of less than the minimum wage.
“If more people reflected on their pension as a 'wage' that they will potentially be relying on for over two decades, they might feel more inclined to plan ahead.”
Along with finding that around twenty-eight percent of those surveyed plan to rely solely on the state pension during retirement, the report also revealed that fifteen percent c of those already retired, or within five years of retirement, had cut back on long-term saving over the last year. The average decrease was £296 a month or £3,552 a year, which equates to a total of £8.3 billion "lost" in retirement savings in the past year.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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