Expected retirement incomes rise for third year in a row

15 January 2016

  • Class of 2016 retirement research shows increase in average expected UK retirement income to £17,700 a year – a year-on-year increase of four per cent
  • More than half feel financially well-prepared for retirement
  • UK average expected annual retirement income is still £1,000 below its peak in 2008

People planning to retire in the coming 12 months expect to receive an annual income of £17,700 – the third annual increase in a row – according to the latest research by Prudential1, a leading provider of pension saving and retirement income solutions.

Each year Prudential conducts unique research into the financial plans and aspirations of people planning to retire in the year ahead. This year’s retirees – the Class of 2016 – expect to be four per cent better off than those who retired in 2015 and who expected on average to receive £17,000 a year.

The study is now in its ninth year and this year’s results are the first based on interviews exclusively with people who will retire under the new pension freedoms regime which came into force in April 2015. The research results suggest that the rule changes have resulted in an increase in confidence about the future among many retirees.

Prudential found that more than half (56 per cent) of the Class of 2016 feel financially well prepared for retirement – up slightly on the 54 per cent from last year’s research.

However, despite the increases in retirement expectations over recent years, average expected annual retirement incomes have still not returned to pre financial crisis levels. The Class of 2016 expect to live on £1,000 a year less than their counterparts who planned to retire in 2008.

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