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1 in 7 retiring in 2013 will rely on State Pension

A study from Prudential has further highlighted the bleak outlook for pensioners looking to retire this year, as it was revealed one in seven will have to rely on the state pension for income.

The state pension currently stands £110.15 per week, meaning those relying solely on this are going to face a very tough retirement.

The study also revealed that one in five retirees is going to slip below the income poverty line, and nearly 25pc of women are going to enter retirement relying on just an income from the state pension.

What this all means is that, if you put one hundred people due to retire this year in the same room, approximately fourteen of those people would be facing the prospect of retirement with a regular income provided by just the state pension. However more people, a total of twenty, would be set to retire with an income below the poverty line, which currently stands at £8,254 per annum. This is because any other pension income they have is minimal.

One in ten people also admitted they didn’t know what they were set to receive from the state pension, while many more overestimated the amount they would receive weekly. This is a cause of great concern, especially at a time when the costs of living have been rising so rapidly.

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

“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. Virtually everyone with the option of a company pension should take advantage of that”, he added.

If you have any questions about your pension, or are looking to start a pension scheme and would like help, please contact one of our specialist pension advisors

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