Embargoed until 00.01 hours on Friday 27 January 2017
RETIREMENT INCOMES HIT POST-FINANCIAL CRISIS HIGH
•
Prudential releases the initial findings from the tenth year of its Class of…
research
•
Members of the Class of 2017 have an average expected retirement income of
£18,100 a year
•
But the income expected by people retiring this year is still £600 lower than the
2008 peak
•
Nearly half of the Class of 2017 feel they are either not financially well-prepared for
retirement or are unsure about their preparations
People planning to retire this year are expecting to live on an average annual income of
£18,100, according to the latest research by Prudential1. The figure now stands at its highest
level since 2008 and shows a fourth consecutive annual increase.
Each year Prudential conducts its unique research into the financial plans and aspirations of
people planning to retire in the year ahead. This year’s retirees – the Class of 2017 – expect
an income £400 a year higher than those who gave up work in 2016, whose average
expected annual retirement income was £17,700.
Expected retirement incomes have now risen consistently since 2013 when they hit a low of
£15,300. However, the Prudential study, now in its tenth year, shows that expected incomes
are still struggling to recover to their pre-financial crisis levels, remaining below the 2008
peak of £18,700.
Prudential’s annual research has tracked retirement trends over a decade that has seen
some of the biggest changes to pensions in generations, and there are signs that these
ongoing changes may be impacting retirees’ confidence about the future. For example, the
research found that nearly half (45 per cent) of people planning to retire in 2017 feel they are
either not financially well prepared for retirement or are unsure about their preparations.
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Kirsty Anderson, a retirement income expert at Prudential, said: “The continued
growth in retirement incomes is something that I’m sure will be welcomed by
everyone planning to retire this year. However, it is striking that the expected income
of people who retired at the height of the financial crisis was higher than for those
who are giving up work in 2017 and still playing catch up 10 years later.
“After a decade of unprecedented changes to the rules around pensions, we are also
seeing a degree of uncertainty from retirees about whether the amount they’ve saved
will leave them financially prepared for the years ahead. For many people, the value
of a consultation with a professional financial adviser, both when saving into a
pension and when considering the income options at retirement, should not be
underestimated.
“Today, as in 2008, the message for people looking to make their retirement as
financially comfortable as possible should be to try to save as much as possible from
as early as possible in their working lives.”
A slow recovery since the financial crisis: Average expected annual incomes for new
retirees – 2008 to 2017
£20,000
£19,000
£18,000
£17,000
£16,000
£15,000
£14,000
2008
2008
£18,700
2009
£17,800
2009
2010
2010
£16,500
2011
2011
£16,600
2012
2012
£15,500
2013
2013
£15,300
2014
2014
£15,800
2015
2015
£17,000
2016
2017
2016
£17,700
2017
£18,100
Source: Prudential’s Class of… research, 2008-2017
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Notes to editors
1
Research Plus conducted an independent online survey for Prudential between 8 and 22
November 2016, among 10,605 non-retired UK adults aged 45+, including 1,000 planning to
retire in 2017.
All expected income figures rounded to the nearest £100.
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