Vince Smith-Hughes

Head of Business Development

Retiring in the city? You'll need an average of £21,000 a year, say the locals  

03 March 2017

  • People in Plymouth, Newcastle and Manchester are the most confident that they are saving enough for a comfortable retirement
  • City-dwellers estimate that they will need an average of £21,000 a year to live comfortably in retirement
  • Londoners will spend 22 years in retirement while Glaswegians will be pensioners for nearly 18 years 

Among the UK’s biggest cities, the workforces of Plymouth, Newcastle and Manchester are the most confident that they are saving enough into their pensions to provide a comfortable life in retirement, according to exclusive research by Prudential1

The research, comparing attitudes to finance and the preparations workers are making for retirement in the 17 largest cities in the UK, found that 46 per cent of workers in Plymouth, 44 per cent of those in Newcastle and 43 per cent in Manchester are confident that their pension savings will be sufficient to support a comfortable life in retirement.

However, three of the UK’s national capital cities find themselves in the bottom half of the league table. In Belfast and Cardiff the proportion of workers expecting a comfortable retirement is as low as 21 per cent and 25 per cent respectively, while the figure in London stands at just over one in three (35 per cent).

The results showed that the UK’s city dwellers estimate they will need a total annual average income in retirement of £21,100, well above the £18,100 a year that Prudential’s Class of 2017 research2 found retirees expecting to live on this year. Londoners believe they will need the highest annual incomes to be comfortable in retirement at £26,400, while at the other end of the scale, savers in Belfast estimate they will need £17,900 a year.

Prudential’s research, combined with the latest data3 from the ONS on life expectancy, also identified the average length of time people can expect to live in retirement. Across the UK’s biggest cities people estimate that on average they will retire just before they turn 64, therefore looking forward to an average of just over 20 years and six months in retirement. People in London (22 years), Norwich and Cardiff (just over 21 years) can expect the longest retirements while those in Manchester, Liverpool and Glasgow can all expect to be retired for less than 19 years.

Vince Smith-Hughes, a retirement income expert at Prudential, said: “These figures paint an interesting picture of the UK’s retirement planning cityscapes, and while it is reassuring to see people being realistic about the money they’ll need to live on when they give up work, it is also worrying how many of them fear they haven’t saved enough to be comfortable.

“In all the UK’s largest cities people are hoping to retire before their State Pension age and on average are likely to be retired for over 20 year years. The best approach for most people looking to have control over when they give up work and wanting to make sure they have enough savings to support a long retirement is to save as much as possible as early as possible in their working lives.”

The research also uncovered that one in five urban dwellers (20 per cent) have received professional retirement advice and this appears to have had a positive impact on how comfortable they believe they will be in retirement. In Newcastle, where nearly three in 10 workers (29 per cent) have taken professional advice, 44 per cent of them believe they have saved enough to be comfortable retirement. But in Belfast, where only 16 per cent of people have taken financial advice, just one in five (21 per cent) believe they have saved enough to retire comfortably.

Vince Smith-Hughes continued: “In many cities we also saw a correlation between taking financial advice and expecting to be comfortable in retirement. For many people looking to secure the best possible quality of life when they give up work, a consultation with a professional financial adviser will help them to plan their pension saving and help to make the right decisions when the time comes to turn those savings into an income.”

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