2016's retirees expect to get £17,700 a year
People retiring in 2016 expect to retire on £17,700, 4.1% more than those who retired in 2015, according to a new survey from Prudential.
Its ‘Class of 2016’ report, which is based on interviews with 1,000 people who expect to retire this year, found that expected incomes have increased for the last three years, though they remain £1,000 below their pre-financial crisis peak of £18,700, in 2008.
The survey is based on income people plan to receive from all sources.
On average, people retiring this year expect to get around 34% of their income from company pensions, 35% from the state pension, 10.5% from other savings and investments and 10.1% from personal pensions with the rest coming from other sources, including equity release, rental income and part time work.
Vince Smith-Hughes, retirement expert at Prudential, said the recent increases in expected incomes reflect increasing confidence about retirement brought about by the pensions freedoms introduced in 2015.
Smith Hughes added: “People should make the most of the Government’s free and impartial Pension Wise service and many who are considering their retirement options should also be seeking professional advice.”
“Pensioners are however still playing catch up with the expectations of those who retired before the financial crisis.”
People in the South East of England expect to be the best off of the UK regions, hoping to get £21,500. People in the West Midlands say they’ll be the least well off, with incomes of £15,200.
A term to describe financial products or ‘plans’ that help older homeowners turn some of the value (equity) of their homes into cash – a lump sum, regular extra income, or sometimes both – and still live in the home. There are two main types of equity release: lifetime mortgages and home reversion plans (see separate entries for both). Whichever type you choose, you borrow money against the value of your property, on which interest is charged, and the loan is repaid when the house is sold after your death.