Next generation of retirees expect to be worse off
Recent research has revealed that the next generation of retirees expect to be worse off in retirement when compared with those retiring this year. People aged between 45 and 55 think that they will have an average annual income in retirement of £14,000 whilst those who are retiring this year think their average annual retirement income will be £17,000.
These expectations about levels of retirement income also impact on the standard of living people think they will enjoy during their retirement. Whilst 50% of those retiring this year think their retirement income will fund a comfortable standard of living, this proportion drops to 27% for those aged 45 to 55.
Richard Espley Head of Equity Release comments:
“Many people’s finances have been adversely affected by the recession and their pension savings haven’t accumulated as they would have wished. The research includes some examples of this – 49% of the next generation of retirees have paused their pension contributions during their working life and of these 11% have stopped making contributions for more than 10 years and 20% for between 3 and 10 years. Further, the research shows that expectations regarding pension income have reduced and people are being realistic about the impact this will have on their lifestyle and standard of living.
“People do have some other choices to fund their retirement years and potentially improve their standard of living. With the increase in property values many people could benefit from Equity Release. Homeowners have the opportunity to release property equity and use the funds to supplement their pension and so can enjoy a more comfortable and fulfilling retirement.”
Content correct at time of publication