35 per cent of Scots are set to retire below poverty line

MORE than a third of Scots could face poverty in retirement, with women in particular set for a pension savings shortfall, it has been claimed.

Research given exclusively to The Scotsman by insurer Prudential shows that 35 per cent of Scots planning to retire this year are set for a retirement income below the poverty line.

The minimum amount of income needed for a "basic but acceptable" standard living is 13,900, according to the Joseph Rowntree Foundation, but Prudential has warned that thousands of Scots will fall short of that amount. Its Class of 2010 Retirement survey estimated that across the UK as a whole 32 per cent of people retiring in 2010 will have a retirement income below the poverty line. Scotland has the third highest proportion of people in line for an annual retirement income of less than 13,900 a year.

Women are more likely than men to receive an income below the poverty line, the report found. UK women retiring this year can expect an average annual retirement income of 12,619, while men will have an estimated average of 19,593 a year on which to live after they retire.

Vince Smith-Hughes, Prudential's head of business development for pensions, said: "Women are more likely to take a career break when they start a family and possibly the last thing on your mind when you're taking care of children and the home is how you're going to fund your retirement years. But as these figures clearly demonstrate those years out of work do have an impact."

The threat posed to retirement plans by the continuing economic uncertainty has also been highlighted by Aon Consulting, which published research suggesting that six in ten Britons believe they will have to delay their retirement. Over a third said the current economic climate would force them to delay retiring by more than five years. However, 31 per cent of British workers said they would rather stop working earlier and receive less income in retirement than have the minimum retirement age extended.

Oliver Rowlands, of Aon Consulting, said recent pension fund turbulence had come as a shock to those used to gold-plated final-salary pensions and state benefits.

"As responsibility for retirement savings has moved from the state and corporations to the individual, people are increasingly realising they need to take an active interest and take steps to make sure they are financially secure once they finish work," he said.