With a significant amount of people not saving enough for retirement and therefore relying more on state support, just 12% of over-40s said that they would survive on the New State Pension of around £8,000 per year.
The largest proportion suggested that they would struggle to survive as just the basics cost more (38%) and 32% suggested that they would look for part-time work to increase their income if they were expected to survive on the state pension.
Others would cut back on everything but the essentials (32%) and look to downsize their property (15%). In addition, 12% would look for suggestions on how to manage their money and 3% would look to their family and friends for support.
Propensity to Work Falls as People Age but Bills Stay the Same:
Interestingly, while 37% of 40 to 50 year olds said they would look for part-time work to increase their income, this falls to 26% of 66 to 70 year olds – which suggests that as people age they realise that they may not be able to continue in employment as long as they had hope.
Just 13% of 66 to 70 year olds – potentially the age group which understands the financial implications of retirement the most – said they could survive on the New State Pension of approximately £8,000.
Andrew Megson, Managing Director of Retirement, said:
“With the cost of living increasing and people struggling to reach common financial milestones such as purchasing a property, it is easy to understand how some reach retirement with little in the way of pension savings. This should improve with the advent of automatic enrolment but people do need to consider carefully just how much income they need to enjoy their retirement.
“Regularly putting money into a pension and ensuring that you have made sufficient contributions to be eligible for the full state pension are just two of the things that people can do to ensure that they never have to make the choice between heating and eating in retirement.”
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