People in London, Scotland and the East are most at risk of poverty in retirement
- About 39%, for some reason, face difficulties paying basic bills in old age.
- People in Northern Ireland and the West Midlands are best prepared
- How to manage your pension if you fear it is falling short: find out below
Londoners and Scots are among those most at risk of hardship in old age, according to a breakdown of current retirement savings across the UK.
Almost two in five people in those parts of the country, and in the east and north-east of England, could struggle to keep up with household bills in retirement.
People in Northern Ireland and the West Midlands are best prepared for old age, although neither region has an overwhelming number of people who are economically well off, according to Scottish Widows research.
Breakdown of aging preparedness in the UK – find out how to jump-start YOUR savings below
The firm built on its previous study of potential retirement outcomes for people ages 22 to 65 to look at the regions where people are doing better and worse.
It surveyed more than 5,000 nationally representative adults and around 1,350 people from ethnic minorities, and projected their likely retirement income against benchmarks from an influential industry study.
The Life Savings and Pensions Association’s standard of living measure is based on different baskets of goods and services such as food and drink, transport, holidays, clothing and social outings.
This found that an individual needs to aim for £12,800 a year for a basic lifestyle, £23,300 for moderate needs and £37,300 for a comfortable old age.
Scroll down to find out what these income levels will get you and what couples need. The PLSA excludes housing costs, although Scottish Widows took this into account in its own study.
Scottish widows found that almost 39 per cent of people in London, Scotland, the east and north-east of England were on track to earn less than the minimum income in old age. People in this group are likely to have difficulty affording basic goods such as food and heat.
STEVE WEBB ANSWERS YOUR QUESTIONS ABOUT PENSIONS
The firm says that, perhaps unexpectedly, its data found no apparent north-south divide in people’s preparation for retirement.
“However, the national retirement forecast offers possible explanations,” he says.
“Retirees in London, for example, are not only more likely than those elsewhere to rent out their home (35 percent vs. 30 percent), but they are also likely to see rental payments eat up 131 percent.” percent of their retirement income, the highest figure in the UK. .
‘Similarly, rentals will account for 98 per cent of retirement income for those living in the east of England.
“Meanwhile, the miserable retirement prospects in the North East and Scotland are probably a product of employment patterns.
“These regions have historically had lower average income and employment rates than the rest of the UK, compromising the ability of people in these regions to save adequately for retirement.”
Policy chief Pete Glancy adds: “The inconvenient truth is that people across the UK are failing to save enough for retirement and some remain unsure when they could be taking some simple steps to make a big difference to their future. financial.
‘For many people it can be difficult to prioritize looking ahead, but taking a realistic look at your pension is not as daunting as it might seem. It’s as simple as checking how much you have in your fund, whether it’s enough for the retirement you want, and what you can do next to put yourself in the best position when you retire.
‘We recommend that people save at least 15 per cent of their salary if they can afford it towards their pension, including employer contributions and tax relief (see below for automatic enrollment minimum, which amounts to 8 per cent of
“Even if this seems out of your reach, taking steps to figure out what you have, if it’s enough, and what options you have is a big step in the right direction.”
> How to manage your pension if you fear it will fall short: find out below
Who pays what: Breakdown of minimum pension contributions for basic rate taxpayers on automatic enrollment today. Contributions are based on a band of your income between £6,240 and £50,270, but some employers are more generous.
Retirement Income Needs for Single People (PLSA Source)
Retirement Income Needs for Couples (PLSA Source)
How to manage your pension if you fear it will fall short
1) If you are worried about whether you have saved enough, investigate your existing pensions. In general terms, it is necessary to ask the following questions to the schemes.
– The current value of the fund.
– The current value of the transfer, because there could be a penalty for the transfer.
– If the pension is a final salary or defined contribution regime. Defined contribution Pensions take contributions from both the employer and employee and invest them to provide a reserve of money at retirement.
Unless you work in the public sector, they have now mostly replaced the more generous gold-plated ones. defined benefit – average or final career salary – pensions, which provide a guaranteed income after retirement until death.
Defined contribution pensions are stingier, with savers bearing the investment risk rather than employers.
– Whether there are guarantees (for example, a guaranteed annuity rate) and whether you would lose them if you moved the fund.
– The projection of the pension at retirement age. You can use a pension calculator to see if you will have enough; They are widely available online.
2) You must add the expected figures to what you expect to receive in the state pension, which is currently £203.85 a week or around £10,600 a year if you qualify for the new full rate. Get a state pension forecast here.
3) If you’re tempted to merge your old pensions, read our guide first to make sure you won’t be penalized.
4) If you have lost track of the old pots, the The government’s free pension tracking service is here.
Be careful if you search online for Pension Tracking Service, as many companies using similar names will appear in the results.
These will also offer to look for your pension, but they will try to charge you or hit you with other services, and they could be fraudulent.