This year's retirees to enjoy record-breaking incomes

Galtero Lara
Enero 13, 2018

People planning to retire this year can expect to live off a record average annual income of £19,900 - a tenth (10%) more than those who retired in 2017 - research from Prudential has found.

Average expected retirement incomes - including money from state and private pensions, savings and investments - have now risen consistently since 2013 when they hit a low of £15,300.

This year's retirees - the Class of 2018 - expect an income 10% higher than those who gave up work in 2017.

Despite all this good news, however, the research further showed that 46% of those planning to retire this year feel they are either not financially well prepared for retirement, or unsure about their preparations.

'The 10 per cent rise from a year ago is even more impressive given the economic and political uncertainty that savers are having to cope with.

Vince Smith-Hughes of Prudential pointed out that the 10% rise is particularly impressive considering the current economic and political uncertainty, but that this uncertainty is also "impacting the confidence of almost half of the Class of 2018 who fear they aren't financially well equipped".

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Guy Opperman, minister for pensions and financial inclusion, said: 'It's fantastic news that more and more people can look forward to a financially secure retirement.

Adding: "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". That said, half believe their expected income will enable them to have comfortable retirement, but 27% believe they do not have enough money for retirement.

Each year Prudential conducts its research into the financial plans and aspirations of people planning to retire in the year ahead.

Despite the record increase, however, Prudential said there were signs uncertainty may be hitting consumer confidence.

"Savers need to have access to the right level of support in the decumulation phase of retirement saving, as well as in the accumulation phase".

Private sector employers have phased them out in favour of stingier defined contribution pensions, where savers bear all the market risk when building retirement pots. Engagement with savers is crucial to helping them to achieve better outcomes.

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