Average retirement incomes have hit a new record high of £19,900 for people planning to stop work this year – £1,000 more than people who gave up work last year and higher than before the recession hit a deacde ago – according to an annual report.
The figure, from pensions firm Prudential, now stands at its highest level since the survey began in 2008 and after five consecutive years of rising incomes.
Expected retirement incomes have now risen consistently since 2013 when they hit a low of £15,300. Prudential’s annual study, called “The Class of…” and which is now in its 11th year, shows that expected incomes have now passed their pre-financial crisis levels and are £1,200 higher than the £18,700 expected by people who retired in 2008.
However, despite the record increase, this year’s findings revealed that nearly half of people in the “Class of 2018” who are planning to retire this year feel that they are either not financially well prepared for retirement or are unsure whether their preparations are sufficient.
Just half say that their expected income will enable them to have comfortable retirement while 27 per cent believe they do not have enough money for retirement.
Vince Smith-Hughes, a retirement income expert at Prudential, said: “The new record high for expected retirement incomes is good news for people planning to retire this year highlighting how saving for the future is paying off. The 10 per cent rise from last year is even more impressive given the economic and political uncertainty that savers are having to cope with.
“That uncertainty is however impacting the confidence of nearly half of the Class of 2018 who fear they aren’t financially well equipped. For many a consultation with a professional financial adviser, both when saving into a pension and considering the income options at retirement, could be a major help.”
Each year Prudential conducts its research into the financial plans and aspirations of people planning to retire in the year ahead. The firm’s report said that there are signs that current financial uncertainty may be hitting confidence despite rising incomes.