News
Retirement income in the UK
03 June, 2011
Umbrella company contractors should take this as a warning and look into the proposed flat-rate pension of around £140 per week as it will not be enough to live on when retiring. According to the Class of 2011 study from Prudential there is a substantial gap between the anticipated incomes of men and women in retirement.
An average income of £19,400 per year is expected by men when they retire, whilst women expect just £12,200 per year. The Class of 2011 surveyed people who were planning to retire in 2011 and found a retirement income gender gap of £6,500.
The gap has closed slightly since 2010. There are some regional differences where women in the South West are expecting to retire with incomes of about £11,700 less than men, and in the South East, women anticipated retirement incomes to be equal.
The study also discovered that 10% of men and 28% of the women intending to retire this year have no pension provision other than that provided by the state.
Prudential spokesman, Vince Smith-Hughes, said that the fact that expected incomes for those retiring in 2011 had stabilised after two years of decline is good news. He added that the Class of 2011 survey and previous studies conducted since 2007 by Prudential underline the message that the best option is to save more and to start saving earlier. Seeking early advice from a financial adviser should be a prerequisite to ensuring you achieve the level of pension income you want and need.
Presently, about 10% of British pensioners are living in poverty - mainly because they do not claim the state benefits they are entitled to. While it is unclear which benefits are to be done away with under the new system, Pensions Minister Steve Webb, has said that the proposed reforms will put an end to the inequalities in the present system.
Webb also advises that the next generation must take more responsibility for their retirement as life expectancy increases, final salary schemes decline and annuity rates decrease.
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