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Fifth Of Those Retiring This Year Will Be Below The Poverty Line

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Joseph Rowntree Foundation says tens of thousands to retire on less than £8,254

Fifth of women expected to retire below the poverty line this year, compared to 14% of men.

State pension expected to account for 36% of the average retirement income in 2013.

Shock research from insurance giant Prudential has claimed that tens of thousands of Britons will retire into poverty this year.

Almost a fifth of people taking their state pension this year will be entering retirement on a total income of less than the current poverty line, which according to the Joseph Rowntree Foundation is estimated at £8,254.

Some of those have inadequate private pension pots that will pay out at best a couple of thousand pounds a year, but 14 per cent of those surveyed by the Pru will retire with no private pension at all and will instead rely solely on the state pension.

Prudential retirement expert Vince Smith-Hughes said: 'Against a backdrop of rising living costs, the basic state pension alone is not nearly enough to provide a comfortable standard of living.

'While it’s a very valuable source of additional income for millions of pensioners, the state pension should ideally only represent a part of someone’s retirement income, not all of it.

'Relying on the state will see many people retiring below the poverty line this year, which shows the importance of building up a personal pension.'

The findings also highlight a gender divide, with 21 per cent of women expected to retire below the poverty line this year, compared to 14 per cent of men, which reflects the fact that men are more likely to have workplace or personal pensions.

The state pension - which is worth around £5,750-a-year, not including any additional second state pension payments - is expected to account for 36 per cent of the average retirement income in 2013.

But a worrying number will rely on the state pension alone, meaning they could turn to their families or forms of credit to see them through their twilight years.

Gordon Morris, of Age UK Enterprises, told This is Money that those who are in trouble should ask them for advice, as there may be ways to boost their income.

He said: 'We help people who go into retirement with quite a lot of debts on credit cards or loans, and the first thing we do for them is a benefits check.

'I would say probably nine out of 10 people who come to us come away with an additional £40 to £60-a-week in benefits they did not realise they could claim.'

Mr Smith-Hughes said the figures show the importance of people saving early for their retirement.

He added: 'Virtually everyone with the option of a company pension should take advantage of that, and the tax relief and employer contributions that go with it.

'If people want to enjoy a comfortable retirement, saving as much as possible as early as possible is important, while seeking advice from a financial adviser or retirement specialist can also help to make the most of retirement income.'

The problem is one that is not likely to be confined just to 2013 either, with research from pension provider Hymans Robertson finding that two thirds of employers think half of their workforce will be unable to retire at state pension age because of inadequate retirement savings.

The increase in workplace defined contribution schemes replacing the more generous defined benefit schemes means many workers not have build up sufficient savings to guarantee a comfortable retirement.

Hymans' Lee Hollingworth said: 'It is essential that we take action now.

'Employees care about how much they will get in retirement, but often aren’t saving enough.

'There is a clear need for a new approach to defined contributions governance practice which enables employees to easily manage their pension saving more effectively to stay on track to achieve an appropriate retirement income target.'

Oh deary me.

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Oh deary me.

I think JRF standard of poverty is something which is less than around £20k pa (couple pensioner, it says couple with children needs £27k and single needs £13.6k)

http://www.jrf.org.uk/publications/minimum-income-2009

£20k with no mortgage, free bus pass, no working cost, winter fuel allowance may well gives a pretty good standard of living.

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Same as it ever was. Pensioners today however, are far better off than they were in the 70's when my grandparents had to live on a pittance. Even with my grandfathers railway pension.

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  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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