Retirement incomes hit high, but more to be done

The future is looking brighter for 2018 retirees, with expected income rates at a record high. Yet nearly half of respondents to our latest ‘Class of’* research are worried they are still financially underprepared for retirement. 

Try to save as much as possible as early as possible in your working life.

Our annual study, now in its eleventh year, shows that people planning to retire this year are expecting to live on an average annual income of £19,900.

This is a 10 percent rise from 2017, and incomes are now at their highest level since the survey began.

Vince Smith-Hughes, a retirement income expert at Prudential, said the record high for expected retirement incomes, highlights how saving for the future is paying off.

"The 10 percent rise from last year is even more impressive given the economic and political uncertainty that savers are having to cope with," he said.

Smith-Hughes puts the boost in people's pension funds down to strong markets and stock market performance, as well as the new State Pension and auto-enrolment into workplace pension schemes.

Expected retirement incomes have now passed their pre-financial crisis levels and are £1,200 higher than the £18,700 expected in 2008.

10%

rise in expected retirement income

27%

believe they do not have enough

46%

feel under prepared for retirement

Uncertainty hitting confidence

Throughout the study, savers have also faced some of the biggest changes to pensions in generations, and there are signs uncertainty may be hitting confidence, despite the record increase.

This year's findings revealed that nearly half (46 percent) of people planning to retire this year, feel they are either not financially well prepared for retirement or are unsure about their preparations.

Just half believe their expected income will enable them to have a comfortable retirement while 27 percent believe they do not have enough money for retirement.

"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," Smith-Hughes said.

"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."

How prepared are you for retirement?

Wherever your sit in your retirement journey, we're here to help.

Visit our pensions and retirement hub to find out more about pensions and to see if you're on track to meeting your future financial needs.

Looking for financial advice?

We believe that getting financial advice is vitally important. So, if you don’t already have an adviser, set up a face-to face meeting with a Prudential Financial Planning adviser in your area. We can review your retirement plans and help make your finances more tax efficient. We offer a restricted advice service.

*Research Plus conducted an independent online survey for Prudential between 29 November and 11 December 2017, among 9.896 non-retired UK adults aged 45+, including 1,000 planning to retire in 2018.

51%

 

 

would consider working past State Pension Age, according to our Class of 2015 research

 

 

 

 

 

30%

 

 

want to reduce hours with their current employer

 

 

 

 

 

10%

 

 

want part-time work with a new employer

 

 

 

So, what are your options for phasing your retirement? 

Going part-time

Going part time is a great way to carry on earning, whilst also giving you back some time for other pursuits. Nearly a third of those surveyed in the Class of 2015 study would like to reduce the hours they work with their current employer. 

Changing jobs

Changing jobs can be refreshing. It could also enable you to move into a part-time role so you have more time to yourself. Just over 10% of people surveyed would look for a part-time job with a new employer. Would you? 

Delaying retirement altogether

Some people are choosing to delay retirement altogether. Just over 10% of those surveyed said they would carry on full-time in their current job. Over half the people surveyed (51%) would consider working past State Pension Age to help improve their financial position. Would you like to stay in your current role for longer? 

There may be other benefits to continuing in some form of employment too. Over half (57%) of survey respondents would consider staying in work to stay mentally and physically fit. Over a third (39%) enjoy working, and 35% would miss the social side of interacting with colleagues if they weren’t working. 

The opportunities a phased retirement may bring can be exciting. It’s important to gather all of the information you need, including talking to your pension provider, to help ensure it’s the best option financially, as well as for your lifestyle.  

*Research Plus conducted an independent online survey for Prudential between 21 November and 4 December 2014 among 7,687 UK non-retired adults aged 45+, including 1,012 intending to retire in 2015 that feature in the above.

 

 

51%

 

 

would consider working past State Pension Age, according to our Class of 2015 research

 

 

 

 

 

30%

 

 

want to reduce hours with their current employer

 

 

 

 

 

10%

 

 

want part-time work with a new employer

 

 

 

So, what are your options for phasing your retirement? 

Going part-time

Going part time is a great way to carry on earning, whilst also giving you back some time for other pursuits. Nearly a third of those surveyed in the Class of 2015 study would like to reduce the hours they work with their current employer. 

Changing jobs

Changing jobs can be refreshing. It could also enable you to move into a part-time role so you have more time to yourself. Just over 10% of people surveyed would look for a part-time job with a new employer. Would you? 

Delaying retirement altogether

Some people are choosing to delay retirement altogether. Just over 10% of those surveyed said they would carry on full-time in their current job. Over half the people surveyed (51%) would consider working past State Pension Age to help improve their financial position. Would you like to stay in your current role for longer? 

There may be other benefits to continuing in some form of employment too. Over half (57%) of survey respondents would consider staying in work to stay mentally and physically fit. Over a third (39%) enjoy working, and 35% would miss the social side of interacting with colleagues if they weren’t working. 

The opportunities a phased retirement may bring can be exciting. It’s important to gather all of the information you need, including talking to your pension provider, to help ensure it’s the best option financially, as well as for your lifestyle.  

*Research Plus conducted an independent online survey for Prudential between 21 November and 4 December 2014 among 7,687 UK non-retired adults aged 45+, including 1,012 intending to retire in 2015 that feature in the above.

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