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Future retirees pessimistic about future


The next generation of retirees believe they will be worse off compared to those choosing to retire this year, according to research from retirement firm Prudential.

The next generation of retirees, people aged 45 to 55, expect their average retirement income to be £14,000 a year when they stop working. Those planning to retire this year are expecting an average income of £17,000.

The research also found that only 27% of those aged 45 to 55 years old believe their pension will provide them with enough income to lead what they consider to be a comfortable life into their retirement. This compares with 50% of people retiring this year. 70% of the next generation retirees say that they expect to have a lower standard of living than people currently in retirement, while only 6% expect their standard of living to be better.

Vince Smith-Hughes, retirement income expert at Prudential, said:
“We know from the results of our annual research that retirement income expectations have been rising over the past few years. In fact, 2015’s retirees have the highest expected retirement incomes of any group since the financial crisis, so it’s surprising to see reduced confidence among the next generation of retirees.

“For most people, starting pension contributions early and continuing these throughout their working life is the best way to achieve a comfortable standard of living in retirement. However it’s not too late for those in their 40s and 50s who are looking to top up their pension pots – for many people this is the time in life when earnings are at their highest, thus providing the best opportunities to save."

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