New research from LV highlights that 28% of Britain’s over-50s have no retirement savings in place.
The LV State of Retirement Report found that 6.25 million Britons over the age of 50 are set to rely on just the state pension in retirement.
No pension provision for retirement
People with just a basic state pension collect up to £5,587 per year and income averages at £9,672 a year when you take into account additional benefit income (eg additional state pension, pensions credit etc).
This is up to 51% lower than the income someone in the UK working full-time on the minimum wage would earn, which is £11,477 per year.
Cutting back on retirement saving
LV’s report also reveals that 15% of those already retired, or within five years of retirement have cut back on contributions to their long-term savings over the last 12 months, with an average decrease of £296 a month or £3,552 per year.
This equates to a total of £8.31 billion ‘lost’ in retirement savings in the last year. Savers into private pension plans have made the most significant cuts in 2012; an average of £523 per month over the last 12 months, compared to a £164 cut on average made by those with public sector pensions.
People should consider pension as a ‘wage’
Ray Chinn, LV head of pensions, said: ‘It is worrying that so many people are saving little or nothing for their retirement ‘wages’, instead expecting to fall back on the state pension. While working hard up to their retirement to bring home a decent wage, I’m sure many will be disappointed to retire with an income equivalent of less than the minimum wage.
‘If more people reflected on their pension as a ‘wage’ that they will potentially be relying on for over two decades, they might feel more inclined to plan ahead.’