One in six will retire with no pension in 2012, says Prudential
Women are twice as likely as men to rely on a State Pension, with 20% of women retiring in 2012 with no pension, compared to eight per cent of men.
Vince Smith-Hughes, retirement income expert at Prudential, says: “While the State Pension is a safety net for pensioners in the UK, it should only ever be regarded as part of an overall retirement plan.
“For far too many people, the State Pension has become the default income option in retirement. Even those who have some private provision depend so heavily on the State that it makes up a third of their retirement income.
“Although State Pension levels will rise to £107.45 for single people per week on Friday, this will still only provide relatively low levels of income to people in retirement.
“It’s a weak safety net for those without any savings and the real income shock for many retirees will come when the gap between their current earnings and the State Pension becomes apparent.
“If people want to maintain their standard of living in retirement it is important that they start to save as much as possible as early as possible, and the vast majority should join company pension schemes where possible.”
According to Prudential’s research, the average person planning to retire will look to their company pension for 35% of their income and the State Pension for 34% of their income. The remainder of retirement income comes from a mixture of savings, investments, personal pension savings, part time work and family members.