Numbers of poverty line pensioners on the rise
To meet its minimum income standard the Joseph Rowntree Foundation estimates that a single person in the UK needs at least £14,400 a year, yet 35% of those retiring in 2011 will retire with an income below this level, up from 32% in 2010.
Prudential’s Class of 2011 study surveyed people intending to retire this year and also revealed that nearly one in five (19%) will retire on an annual income of less than £10,000 a year.
Women planning to retire this year are even more likely to have incomes below the poverty line. The research found 40% of women retiring in 2011 will have a pension income of less than £14,400 compared with 30% of men. Prudential’s research also found that a quarter (26%) of women compared with 12% of men will retire this year with less than £10,000 a year to live on.
Commenting, Vince Smith-Hughes, head of business development at Prudential said: “Although our research shows that increasing numbers of those planning to retire will face tough financial decisions, there are many options available to boost retirement income.
“People approaching retirement should seek professional financial advice as a prerequisite to maximising their income. We would recommend that you review your finances with an adviser annually in the years immediately before your planned retirement.”
Prudential’s Class of 2011 research also found that those planning to retire in Wales and south east England this year are most likely to face retirement poverty. Forty-two per cent of this year’s planned retirees in Wales will do so with an income below the poverty line with 27% expecting an income of less than £10,000. In the south east of England two-fifths (39%) of those planning retirement in 2011 will do so with incomes below the poverty line and a quarter expect to live on less than £10,000 a year.