One in three unconfident about retirement income

Over a third of people surveyed by Which? Money¹ aren’t sure they’ll have enough to live on when they retire,compared to just 12 per cent who are very confident they can look forward to a comfortable retirement.

There is a gap of around £12,000 a year between the amount people want to live on in retirement and what the basic state pension will provide, Which? Money warns.

On average people expect they’ll need £312 a week after tax for a comfortable retirement. The basic state pension is currently only £84.25 a week.²

While some people will get other income - for example from a partner – most are likely to need to make other savings to bridge the gap. Worryingly, more than a third of people surveyed aren’t currently saving for their retirement using pension schemes, savings and investments or property.

Martyn Hocking, Editor, Which? Money, says:

“It is worrying that one in three people aren’t sure they’ll have enough to live on when they get older. There’s a huge difference between the amount of income people want to have in retirement and the amount they’ll get from the Government.

 "The basic rule is that you should  start saving for your retirement as early as you can - the longer you leave it, the more you will need to save.”³

– Ends –

Notes to Editor

A full article “A richer retirement” appears in the February issue of Which? Money magazine. For further information, the full article, a copy of the magazine or an interview, contact Nicola Frame.

Which? Money is launched on 1^st February and provides impartial, expert information on money matters, to help people make the right choices. Which? Money is published monthly and is available by subscription only.  

A special trial offer of 2 issues for £2 is available by calling0800 0321 177.

1. In November 2006, 513 face-to-face interviews were carried out with a nationally representative sample of adults aged 16+ who were working or seeking work. Survey participants were asked how much they want to live on in retirement and what they are doing to achieve those goals. 
2. Some people will also be entitled to an earnings-related additional state pension, up to a maximum of almost £150 a week currently. People who contract-out (opt out) of the additional state pension give up some or all of this pension and instead build up a retirement fund in a personal pension or employer’s pension scheme.

Which? campaigning on pensions

Which? supports the Government’s Pensions White Paper of December 2006 which opted for a National Pension Saving Scheme (NPSS) system of Personal Accounts.

We fully support this scheme because it is simple, low-cost and has a manageable choice of funds. It will also be run by an independent Board people can trust.

Which? supports proposals for:

• A three per cent compulsory employer contribution; A four per cent employee contribution; A one per cent tax relief contribution.
• Auto-enrolment
• Review of transfers in and out to Personal Accounts in 2020.

Visit www.which.co.uk/pensions for more information about Which?’s campaign.