Retirees overestimate value of state pension, research shows

Over 15 per cent of people who are planning on taking retirement in 2015 will be doing so with only the state ?pension as a means of support…

Over 15 per cent of people who are planning on taking retirement in 2015 will be doing so with only the state ?pension as a means of support. 

That is the conclusion of research carried out by Prudential?, which concluded this would leave them only just above the poverty line. 

Currently, the full state pension is just £115.95 per week or just over £6,000 per annum. According to the Joseph Rowntree Foundation's minimum income standard, a pensioner would need £9,500 per year to achieve an adequate standard of living. 

It seems that many are unsure just how much the State Pension is, with 37 per cent believing it is worth more than its current value and eight per cent completely ignorant of its value. 

There is a marked discrepancy in terms of the sexes when it comes to pension savings too. 

While some 21 per cent of women have no pension savings, just nine per cent of men are in the same position. Overall, women anticipate the State Pension will account for 41 per cent of their retirement income, while that figure is just 31 per cent for men. 

Retirement income expert at Prudential Vince Smith-Hughes is keen to remind retirees that only those people with pension savings can take advantage of the recent reforms to the system introduced by the government. 

"People who rely solely on the State Pension are likely to have to face serious financial belt-tightening when they give up work," he said. 

Mr Smith-Hughes suggested it was vital not to overestimate the value of the State Pension and hinted that people should not rely on it and rather look to save as much as they can from as early on in their career as possible.

Tell others:

shortlink