Age UK uses cookies to ensure that we give you the best experience. By continuing to use this site, you are agreeing to our policy. To read more about how we use cookies and how you can control them Read our cookie policy
Skip to content
Please donate

Income down two-thirds for retirees

Published on 22 April 2014 02:30 PM

Older people should be prepared for their annual income to drop by two-thirds when they enter retirement, it is warned.

LV's latest State of Retirement report reveals that the average annual pension income, including state pension, is just £8,774.

This is significantly less than the typical annual salary of £25,480 for the over-60s, and around 24% lower than the minimum wage.

What makes the finding more worrying is the fact that a large proportion of retirees will have no pension savings left within 5 years of retirement, meaning they will rely solely on the state pension.

Some 19% of women do not have any private pension savings at all, compared with 12% of men who are in the same boat.

This group will therefore see their income fall by 78% as they potentially have to live on a 'pension wage' of just £110 a week.

Woman and men expect to work longer than anticipated

The report also reveals that 30% of women over the age of 50 expect to work longer than previously anticipated compared with 23% of men, while as many as 12% of retirees have outstanding credit card debt, 7% have an outstanding mortgage and 5% are overdrawn.

Women, meanwhile, will continue to suffer from the gender pay divide that currently exists in the workplace.

They will have to live on an annual retirement income of £6,580 - up to 40% less than the average income of £10,967 for men.

Other findings show that 30% of workers aged between 60 and 69 have altered their retirement plans in the space of the last 12 months, with 85% of these now expecting to retire later than they had originally planned.

Furthermore, 17% of those between the ages of 50 and 59 think they will have to work past the state retirement age due to financial reasons, while 19% intend to carry on working because they want to.

Some people are choosing to delay retirement rather than save more, with 10% having decreased their pension savings by an average of £50 a year. This equates to a total of £535 million lost in retirement savings.

Copyright Press Association 2014

 

Last updated: Oct 06 2017

Become part of our story

Sign up today

Back to top