Retirees in 2018 'have highest income expectations in at least 10 years'
PEOPLE retiring this year have the highest typical expectations for their incomes in at least 10 years, a report has found.
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On average, those retiring in 2018 expect to have an income of £19,900 a year - the highest figure since the research from Prudential started, in 2008.
The "class of 2018" anticipates having an average income which is 10 per cent higher than those who ended their working lives in 2017, whose average expected annual retirement income was £18,100.
Expected retirement incomes are now £1,200 higher than the £18,700 people retiring in 2008 were anticipating.
The report found expected retirement incomes have been on the increase each year since 2013, when they hit a low of £15,300.
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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 un
A pensions revolution has taken place since Prudential first launched its research in 2008, with the launch of automatic enrolment into workplace pensions in 2012 and more recently the pension freedoms for over-55s, meaning people are no longer required to buy an annuity when they retire.
But "gold-plated" final salary pension schemes which promise a certain level of income have also become more scarce in recent years.
The research found that despite the anticipated income boost, 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, only 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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Syd Prior, 96. Syd retired from his meet and greet role at B&Q’s New Malden branch in South-West London days before his 97th birthday in 2011.
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 the class of 2018 who fear they aren't financially well equipped."
He continued: "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."
Some 1,000 people planning to retire in 2018 were surveyed for the report.
