Brits Need More in the Pension Pot
Brits are going to have to start saving if they want to have sufficient money to live on when they retire.
Brits set to retire this year will need an average total lifetime income of £130,000 in addition to state benefits to cover them in their old age, a new survey claims.
But those who retire in the coming 15 years will need even more as state benefits form a lower part of pensioner income and people live longer, according to Prudential.
Life expectancy is also increasing with today's 65 year-old man expected to reach 82 and a woman retiring at 60 likely to live to longer than 85.
Prudential calculate that with the average state benefits coming in at £6,250 a year, pensioners will need an additional £6,250 a year from other sources.
Men will consequently need £106,250 to get them though their retirement with women needing £156,250.
Today's average personal pension fund amounts to £40,000 at retirement, which at current annuity rates will produce an income of just £2,000 a year. On average a saver would need a £300,000 pension fund to ensure annual income of £15,000.
Prudential executive director, Roger Ramsden, said: "Pensioner incomes have risen faster than average earnings over the past eight years, yet today’s pensioners are still grappling with a retirement gap which can only grow unless we all take action.
"Average pensioner incomes, of course, do not tell the whole story. Nearly one-in-five OAPs currently live on just £5,000 a year and one-in-three get by on £7,500. They are depressingly aware of the retirement gap, which for them is the gap between living a comfortable life and living on the breadline."
