People planning to retire this year have the best expectations for their annual incomes since 2008, a survey has found. On average, those set to retire in 2018 expect to have an income for £19,900, according to Prudential.
Each year, Prudential asks people planning to retire in the year ahead about their financial plans and aspirations. This year’s retirees expect an income 10 per cent higher than those who gave up work in 2017, whose average expected annual retirement income was £18,100.
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Expected retirement incomes have now risen consistently since 2013 when they hit a low of £15,300. Prudential’s 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.
Nearly half of 2018 retirees not financially prepared
Despite the record increase, this year’s findings revealed that nearly half (46 per cent) 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 per cent) believe their expected income will enable them to have comfortable retirement while 27 per cent believe they do not have enough money for retirement.
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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 per cent 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 2018 retirees 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."
Here's how expected retirement incomes have risen – and fallen – since 2008:
- 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