The latest data published in Prudential’s Class of 2011 survey shows that one in five people planning to retire in 2011 have no private or company pensions and will largely depend on state pensions for their post-retirement income.
The report shows that 10% of men and a whopping 28% of women will depend on their savings and the state pension to fund their retirement in this year.
A majority of retirees are unaware of the state pension amount despite such a sizable population being dependent on it as their major source of income. Twenty-five percent of people retiring this year thought that the state pension pays out at least £110 a week (significantly higher than the present £97.65 weekly pay-out). Around seven percent of retirees admitted that they have no idea about the weekly pay-out amount.
The survey found that people retiring in 2011 will draw 37% of their total income from state pension, 35% from company pension, 10% from other investments and savings, 9% from personal pension, 6% from a part-time job and 2% from property (release of equity or rental).
“A fifth of this year’s retirees are completely reliant on the state pension to fund their life in retirement. While state pension levels are due to rise to around £102 a week later this year, this still provides a relatively low level of income, even taking into account the means tested Pension Credit or the suggested £140 flat rate, when compared to average salaries for workers in the UK”, said Head of Business Development at Prudential Vince Smith-Hughes.