Shocking new figures reveal that one in seven people retiring this year have no pension savings and will have to rely on the state pension as their only source of income.
The study by financial firm The Prudential also found that women are three times as more likely to have no pension – with just over a fifth (22%) sourcing all their income from the state pension compared to 7% of men.
Putting the statistics into numbers, 140 out of every 1,000 people retiring this year have no pension savings.
As around 600,000 people retire every year, according to the Office of National Statistics, that means 84,000 people will retire each year until 2018 without any pension savings.
The Prudential research also showed the state pension accounts for over a third of retirement income for the average person giving up work.
Pensioners need at least £182 a week to get by
From April 2016, the new flat rate state pension pays £155.65 a week to someone with 35 qualifying years of national insurance contributions.
However, separate research by Age UK reckons around 50,000 women and 20,000 men do not have enough working years to qualify for any state pension payments.
The Joseph Rowntree Foundation, a think tank, has calculated that the average minimum amount a pensioner needs to spend is £182.98 a week, or £9,512 a year. The full state pension will pay £8,093 of this amount, leaving a £1,419 or £27.28 shortfall.
“These figures show that many people approaching retirement can expect state pension payments that fall well short of the minimum standards needed for a comfortable financial future,” said a Prudential spokesman.
Workers have a responsibility to save
The government agrees that more people need to take on the responsibility of saving during their working life to fund their retirement.
“Workers need to save more if they want to maintain their standard of living in retirement,” said a Department of Work and Pensions spokesman.
“That’s why pension freedoms and auto-enrolment pensions have been introduced and cost of living increases are protected with the triple lock promise.
“Some people will miss out on the full state pension payments, but in general, most people will be better off with a higher weekly income than they would have received under the old state pension arrangements.”
