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As worries persist over preparations...

Retirement incomes poised to hit record high

Prudential retirement

More people are able to look forward to higher income in retirement


Those planning to retire this year can expect the highest average annual income for ten years, according to new research.

Retirees will receive an average £19,900, the highest level since Prudential’s survey began in 2008 and after five consecutive years of rising incomes.

This year’s retirees expect an income 10% higher than those who gave up work in 2017, whose average expected annual retirement income was £18,100. 

Expected retirement incomes have now risen consistently since 2013 when they hit a low of £15,300.

Prudential’s annual study shows that expected incomes have now passed their pre-financial crisis levels and are £1,200 higher than the £18,700 expected in 2008.

The research has tracked retirement trends over a period that has seen some of the biggest changes to pensions in generations as well as major political and economic upheavals and there are signs uncertainty may be hitting confidence despite rising incomes.

Despite the record increase, this year’s findings revealed that nearly half (46%) of people planning to retire this year feel they are either not financially well prepared for retirement or are unsure about their preparations. 

Meanwhile, just half (50%) believe their expected income will enable them to have comfortable retirement while 27% believe they do not have enough money for retirement. 

Vince Smith-Hughes, a retirement income expert at Prudential, said: “The new record high for expected retirement incomes is good news for people planning to retire this year highlighting how saving for the future is paying off. 

“The 10% rise from last year is even more impressive given the economic and political uncertainty that savers are having to cope with.

“That uncertainty is however impacting the confidence of nearly half of the Class of 2018 who fear they aren’t financially well equipped.” 

The table below shows how expected retirement incomes have risen – and fallen – since 2008.

CLASS OF

EXPECTED INCOME

2008

£18,700

2009

£17,800

2010

£16,500

2011

£16,600

2012

£15,500

2013

£15,300

2014

£15,800

2015

£17,000

2016

£17,700

2017

£18,100

2018

£19,900

Source: Prudential’s Class of… research, 2008-2018

 

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