Are you confused about your retirement income?

Pension pig

New research from BlackRock has branded nine million 45-54 year olds a 'lost generation' when it comes to retirement as it is revealed this age bracket is the most financially squeezed in the country.

Half of those aged 45-54 have not started saving for retirement, with 52 pence in every pound they earn spent on bills.

BlackRock says those within this age group are the most burdened by bills, save the least of any Britons, and are the most pessimistic about their financial future.

Typically, those aged 45-54 save around 12 pence in every pound they earn, compared with 18 pence for those aged 24-35.

Despite this, the average 45-54 year old still expects a sizeable retirement income of £28,655 per year - almost twice the national average of £15,548 for a single pensioner today.

Those surveyed believe a pension pot of £294,000 will be enough to generate this, but BlackRock says a pot nearly double this amount is actually need (£549,000).

As well as this, research from LV= shows that millions of people are unsure how to convert their pension pot into income in the first place.

LV= reveals that only 19% of people have ever heard of a fixed term annuity and fewer than 10% of people fully understand income drawdown.

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Furthermore, just 16% of people realise that by disclosing their health and lifestyle factors they could be eligible for an enhanced annuity, which could boost their income.

Lack of planning

Phil Brown, head of retirement propositions at LV=, says the concern is that most people will simply buy their annuity from the provider they have saved their pension with, not realising this might not be the best value option.

Tony Stenning, head of UK retail at BlackRock, says many people "have lowered their aspirations for the kind of lifestyle they want in retirement", which could be a result of a lack of planning and information.

Brown says it is important that pre-retirees do not simply choose the "familiar" or easy option.

"Unlike other major financial decisions, once someone chooses how to structure their retirement income, they can't typically review their decision further down the line. To ensure retirees are able to maximise their pension funds, it's crucial they selection the solution that offers them the level of income and flexibility they need," he adds.

This article was written for our sister website Money Observer

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The lost generation 45-54. What drivel. I am from a council house in Edinbourgh and the one thing I knew was I was not going back to a council house. In 1958 my first wage was £3.50 old money that is £1.75 a week for 40 hours I was 15 (A pint off beer was 6p new money 'yes' we were in pubs at 15, it is not new this under age drinking).
But I knew one thing never get in debt, why would you pay, lets say £100 for something that cost £80, when in a years time it is worth £50.
If we brought back the deposit system, people would think about debt. You have to save 25% of the cost off the item, once you have that 25% you start to think ' Do I really need this item"
I see it is now pensioner bashing time, we the pensioner have to much, every thing I have, I have work for, never a penny from the state.
I still work basic rate nobody will do my job, below them (still pay tax) does two things keeps me thinking and buys better quality wine.
If you earn £70 a hour or £7 an hour then that is what you have to do. One is an incentive to do better or accept your lot. I have never been an educated man as you can see from the writng. But I know one thing it does does not come free

Do you think you could do a article on saving/making money for people already on a pension.........Say less than £21,000 that in 5 years will be worth £12,000