One in eight people will retire this year with no pension provision and many will be totally reliant on the state pension.
According to research from Prudential, those without pension savings will be starting their retirement with an annual income that stands £1,452 below the Joseph Rowntree Foundation’s minimum income standard for a single pensioner.
Those relying entirely on the state pension will have an income of just £164.35 a week, or just more than £8,500 a year from April.
As a benchmark, The Joseph Rowntree Foundation recommends that a single pension has at least £192.27 per week for an ‘acceptable standard of living’, meaning those relying on the state pension alone are £27.92 short each week.
Women are more likely to struggle during retirement due to a lack of savings. In fact, almost a fifth (18%) will retire with no pension in 2018 compared to 7% of men.
Reassuringly, the pensions gender pay gap has been narrowing over time, with research suggesting that 22% of women had no pension savings in 2016 compared to 7% of men.
In 2008, almost a third of women (32%) were planning to retire with no retirement fund.
Of those savers retiring this year with pension savings of their own, 42% have saved the bulk of their pension in a workplace final salary scheme, 13% have saved in a personal pension, and 12% have put the majority of their money in a workplace defined contribution scheme.
Most of those who’ve spent time building up their pension pot will be able to use this money to fund their retirement, but we’re seeing a shocking number of people losing their hard-earned savings to sophisticated pension scams.
We often hear from people who have received calls from so-called investment companies encouraging them to transfer their pension funds into ‘low risk, high return’ investment vehicles.
Unfortunately, these schemes are often poorly set up, not as rewarding as initially promised, or created to fleece people of their hard-earned savings.
Such scams can leave savers struggling to fund their retirement having lost a portion of their pension. In the most severe cases, savers can have their retirement funds completely depleted.
If you’re concerned about the security of your pension savings or you’ve fallen victim to a pension or investment scam, please get in touch with the team at Pension Justice.