Retirement income expectations
- £15,500 expected annual retirement income – Currently at a five year low, retirees’ expected retirement incomes have dropped by more than 16% since 2008.
- £5,750 gender gap – Women retiring this year expect their annual retirement income to be a third lower than that of men. The gender gap has fallen from £6,500 in 2011 and has narrowed steadily since Prudential first measured it in 2009.
- 16% to depend on State Pension – One in six people retiring this year expect to depend entirely on the State Pension for income in retirement.
- 29% of self-employed depend on State Pension – Nearly a third of self-employed workers expect to depend entirely on the State Pension; 40% say they’ll never retire.
Debts and savings
- 18% have outstanding debts – The average amount owed by people retiring in 2012 is £38,200, up significantly from £33,100 last year.
- £260 monthly repayments – The average repayment on outstanding debts made by those retiring this year is equal to a fifth (19%) of their expected £1,291 monthly income.
- £9,546 owed in hidden debts – One in five people (20%) in a relationship have debts their partner doesn’t know about, with an average outstanding amount of £9,546.
- £2,004 in secret savings – 14 per cent of people in a relationship have savings their partner doesn’t know about, worth on average £2,004.
Tax relief
- £12,000 tax relief – The value of the tax relief received by a worker on average wages paying £100 a month into a pension scheme over 40 years.4
- £1.8bn tax relief lost – The collective amount of tax relief lost every year by the 31% of workers who have never joined a company pension scheme.
- 59 per cent of higher rate tax payers lose out – Six out of 10 higher rate taxpayers fail to claim the full 40% tax relief they are entitled to on their pension contributions.
- £1,020 tax relief lost – The average value of the tax relief lost every year by a higher rate tax payer who fails to claim 40% pension tax relief.
Financial planning for the future
- 20% prepare for ill-health – Only one in five people retiring this year have made financial provision for ill-health in retirement.
- 45% plan for higher income needs as they age – Less than half of retirees have prepared for the fact that they may need more income in retirement as they get older.
- 49% will leave an inheritance – The proportion of people retiring this year that are confident they will be able to afford to leave an inheritance, down from 52% in 2011.
- 16% discuss finances – Just one in six couples regularly discuss retirement income and pension planning; only 13% have seen a financial adviser together in the past five years.
- 23% argue over money – Nearly a quarter of couples admit they fight over finances and money is the third most common cause of arguments among UK couples.
