Source : Press Association
Published on 16 March 2011 06:30 AM
One in five people who retire this year will be completely reliant on the state pension for their income, a survey suggests.
Around 20% of people due to give up work in 2011 admitted that they did not have a company or personal pension to boost their retirement income, according to insurer Prudential.
The problem was particularly acute among women, 28% of whom will only have the state pension and other benefits to cover their living costs.
Many people were also over-estimating how much money they would receive from the state pension, with 25% expecting to get at least £110 a week, compared with the £97.65 a week that is currently paid to a single person. A further 13% of people admitted they had no idea how much the state pension was worth.
The average person retiring this year will rely on the state pension to provide 37% of their income post-work, while 35% will come from a company pension, a further 10% from other savings and investments and 9% from a personal pension.
People expect to get 6% of their income from a part-time job and 2% from property, either through rental income or equity release.
Vince Smith-Hughes, head of business development at Prudential, said: "A fifth of this year's retirees are completely reliant on the state pension to fund their life in retirement.
"While state pension levels are due to rise to around £102 a week later this year, this still provides a relatively low level of income, even taking into account the means-tested Pension Credit or the suggested £140 flat rate, when compared to average salaries for workers in the UK.
"A lack of understanding of the value of the state pension and Pension Credit means that many people planning to retire this year may have no firm idea of what their retirement income will be."
People in Wales are the most reliant on the state pension, with 29% saying it will provide their only income, compared with just 12% of people in the West Midlands.
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