Anticipated retirement incomes compared with what people are likely to actually receive varies hugely across the UK, new research from AXA Wealth has revealed, creating a national shortfall of more than £4,500 - the cost of a cruise, a nearly new car or even a face lift.
AXA Wealth’s research, conducted by YouGov*, has shown that across the UK, on average, people think they will need £22,279.40 a year to live comfortably in retirement. However, with the savings plans they have in place they are likely to receive only £17,665.44, creating a shortfall in retirement income of £4,613.96.
The largest shortfall is in the East Midlands, where those surveyed will receive £4,658.16 a year less than they feel they need to live on. This is closely followed by the South East, where the shortfall is £4,070.04, and then the South West, where the disparity is £3,935.84.
London has a smaller shortfall of £2,427.36 despite being the region that anticipated needing the highest level of income in retirement to maintain their current standard of living.
 It is better news in Northern Ireland, the only region in the UK, where individuals are likely to find themselves with an additional £1,243.84 per year in retirement.
Nick Elphick, MD of Specialist Products, AXA Wealth, said: “The findings demonstrate a nation that is, on the whole, chronically ill-prepared for retirement. An average national shortfall of £4,614 per year is hugely concerning, as are the significant regional variations. For those regions with the largest shortfalls there are significant sums to make up once in retirement, and this will doubtlessly impact the lifestyle ambitions of many people.
“For the areas anticipating needing the highest level of income, such as Londoners, the shortfall is relatively small. This perhaps highlights how residents within these regions have grown accustomed to the high cost of living and are viewing their retirement needs based on that experience.
“This research highlights the need for future generations to save more using available tax allowances and reliefs that will take advantage of the changing tax landscape. Doing this as part of a lifetime financial plan can deliver significant results.”
When considered alongside AXA’s recent Big Money Index**, which found that one in four consumers will be forced to make major lifestyle changes to cope with financial turmoil, these findings highlight that saving for retirement is not a priority. While consumers have a realistic understanding of their income requirements in retirement, this target is unlikely to be achieved.
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