Anyone giving up work in 2018 can look forward to enjoying the highest annual income in retirement since financial experts started tracking the figure a decade ago.
After five years of rising incomes, those retiring expect to have an average annual income of £19,900, which includes the state pension.
The figure has risen by 10% in a year as those retiring in 2017 managed an average retirement income of £18,100.
Retirement incomes have risen each year since 2013, when they hit a low of £15,300, according to a study by life and pensions giant The Prudential. This year’s expected average income is £1,200 – or £23 a week – higher than the £18,700 paid in 2008.
The firm tracks financial trends in retirement by speaking to people retiring each year.
Financial uncertainty for many
The research reveals that despite a record in expected retirement income, 46% of those planning to give up work this year feel uncertain and unprepared about the finances after retiring.
But 50% believe their income will provide a comfortable retirement, while just over one-in-four believe they do not have enough money set aside.
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. For many a consultation with a professional financial adviser, both when saving into a pension and considering the income options at retirement, could be a major help.
“But the message remains the same for anyone looking to make their retirement as financially comfortable as possible – try to save as much as possible as early as possible in your working life.”
Expected retirement incomes
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Source: The Prudential