Later Life

Retirement income hits record high but uncertainty continues

People planning to retire this year are expecting to live on an average annual income of £19,900, 10% higher than last year's retirees, according to Prudential.

Rozi Jones
|
12th January 2018
old people pension retirement
"The 10 per cent rise from last year is even more impressive given the economic and political uncertainty that savers are having to cope with."

People planning to retire this year are expecting to live on an average annual income of £19,900, 10% higher than last year's retirees, according to Prudential.

This is the highest retirement income level since Prudential's survey began in 2008 and marks five consecutive years of rising incomes.

Expected retirement incomes have now risen consistently since 2013 when they hit a low of £15,300. Expected incomes have now passed their pre-financial crisis levels and are £1,200 higher than the £18,700 expected in 2008.
 
Yet despite the record increase, this year’s findings revealed that nearly half (46%) of people planning to retire this year feel they are either not financially well prepared for retirement or are unsure about their preparations.
 
Meanwhile, just 50% believe their expected income will enable them to have comfortable retirement while 27% believe they do not have enough money for retirement.

Vince Smith-Hughes, retirement income expert at Prudential, said: “The new record high for expected retirement incomes is good news for people planning to retire this year highlighting how saving for the future is paying off. The 10 per cent rise from last year is even more impressive given the economic and political uncertainty that savers are having to cope with.
 
“That uncertainty is however impacting the confidence of nearly half of the Class of 2018 who fear they aren’t financially well equipped. For many a consultation with a professional financial adviser, both when saving into a pension and considering the income options at retirement, could be a major help.
 
“But the message remains the same for anyone looking to make their retirement as financially comfortable as possible - try to save as much as possible as early as possible in your working life.”

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