Future retirees aged 45 to 55 years-old expect to retire on around a fifth less than people retiring in 2015, according to research by Prudential.
The study by the insurance company shows that 45-55 year-olds think they’ll work until they turn 65 and retire on an average annual income of £14,000.
A previous survey by Prudential found that the average 2015 retiree is likely to receive an annual income of £17,000 during retirement.
This is a generational gap of £3,000 which leaves people retiring this year 18% better off than future retirees.
Of the 1,004 45-55 year-olds surveyed:
- 27% believe their pension will provide a comfortable life in retirement – compared to 50% of 2015 retirees
- 70% think they’ll have a lower standard of living than those currently in retirement
- 6% say their standard of living will be better.
The study reveals that many future retirees (49%) have been forced to put their pension contributions on hold, which risks leaving them short of income in retirement. More in 1 in 10 (11%) have stopped saving for more than a decade while a fifth have not made contributions for 3-10 years.
Vince Smith-Hughes, retirement income expert at Prudential, said it is “surprising” that confidence is declining among retirees:
“For most people, starting pension contributions early and continuing these throughout their working life [sic] is the best way to achieve a comfortable standard of living in retirement.
“However it’s not too late for those in their 40s and 50s who are looking to top up their pension pots – for many people this is the time in life when earnings are at their highest, thus providing the best opportunities to save.”
We can help you plan your retirement strategy. Contact us for more information.