Half of all working Scots facing poor pensions

About 46 per cent of Scots can expect to retire on between 25 and 40 per cent of their final salary and are likely to be reliant on state benefits to supplement their income, according to JP Morgan’s Pension Map of Britain study of retirement provision. The figure is a 7 per cent increase on the 39 per cent expected to have a difficult retirement in Scotland when the study was launched in 1996.

About 32 per cent are likely to have a comfortable retirement - down from 43 per cent in 1996 - with their pension provision yielding a retirement income of 50 per cent or more of their final salary, the research showed.

But the number of people in Scotland who would be okay in retirement - whose pension provision would yield a retirement income of between 40 and 50 per cent of their final salary - has risen to 22 per cent from 18 per cent in 1996 .

However, Scotland fared slightly better than the UK as a whole, where more than half of the working population faces hardship in retirement, the study found.

It showed that 16 million workers - or 54 per cent of the working population - will have a pension income of less than 40 per cent of their working salary. This is an increase of 3.45 million people on the firm’s figures from last year, and an increase of more than six million facing hardship since 1996.

The number of British retirees expected to be comfortable in retirement has fallen from 10.75 million workers in 1996 to 8.7 million - or just 29 per cent of the population. The number of those expected to be financially okay in retirement has fallen from 5.65 million in 2001 to 4.9 million in 2002 - a slight increase from the 4.18 million figure in the 1996 study.

Regions faring worst in retirement include the South West, with 72 per cent of its population expecting hardship, and Greater London - which saw the biggest one-year increase, meaning that 50 per cent of Londoners now face retirement hardship.

Faring best were the East Midlands and Northern Ireland.