The average income for a person retiring in 2017 is £18,100 a year, according to the latest research from Prudential.
This is the fourth year in a row that retirees’ average income has risen and is £400 up on last year. However it still remains £600 a year below its 2008 peak, when the typical retiree had annual income of £18,700 a year.
The Class of 2017 survey also found that despite average incomes rising, recent pension reforms are affecting retirees’ confidence in managing their financial affairs. It found that nearly half (45%) were either not financially prepared for retirement or unsure of their financial plans.
Kirsty Anderson, a retirement income expert at Prudential, says: “The continued growth in retirement incomes is something that I’m sure will be welcomed by everyone planning to retire this year. However, it is striking that the expected income of people who retired at the height of the financial crisis was higher than for those who are giving up work in 2017 and still playing catch up 10 years later.
“After a decade of unprecedented changes to the rules around pensions, we are also seeing a degree of uncertainty from retirees about whether the amount they’ve saved will leave them financially prepared for the years ahead. For many people, the value of a consultation with a professional financial adviser, both when saving into a pension and when considering the income options at retirement, should not be underestimated.”
A slow recovery since the financial crisis: Average expected annual incomes for new retirees – 2008 to 2017
Source: Prudential’s Class of… research, 2008-2017