State pension income ‘not enough’ as millions not prepared for retirement

Experts are warning that millions of women are at risk of poverty in retirement due to a lack of retirement savings.

Nearly seven million over 50s have no private pension, according to the latest research carried out by SunLife.

The firm’s Life Well Spent report found that 20 percent of men over 50 and 33 percent of women in the same age demographic are solely relying on their state pension to fund their retirement plans.

As it stands, the full new state pension comes to £10,600 annually which is far below the £23,000 a year needed to have a “moderate” retirement, according to Retirement Living Standards.

To achieve a “minimum standard of living”, a pensioner would need an annual income of £12,800, which is still more than £2,000 more than the state pension.

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This means that around 6.9 million Britons over the age of 50 are at risk of poverty in retirement.

A survey carried out by SunLife found that two in five over 50s worried about ‘running out of money’ during retirement.

Some 92 percent of those relying on their state pensioners are worried about money, while four in ten are concerned about “running out of money” during retirement.

Even 86 percent of those who have a private pension have financial fears about what their retirement will look like.

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Data from SunLife highlights that 18 percent of homeowners aged 50 plus have no private pension savings, while 17 percent plan to solely use their state pension.

Mark Screeton, the CEO at SunLife, broke down his concerns for millions of Britons who are ill-prepared for life postwork.

He explained: “It is really worrying that so many over 50s – particularly women – are relying on the state pension alone to fund their retirement.

“That level of income is just not enough to sustain even a basic standard of living, let alone a lifestyle that most people would call ‘enjoyable’.”

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The pensions expert offered advice to those looking to use their assets to free up capital when it comes to preparing for retirement.

Mr Screeton added: “For some homeowners, equity release is one way they choose to boost retirement income.

“In fact, according to this year’s report, one in 50 over 55s have already taken out an equity release plan and, of those, 21 percent used the money to supplement their income, with 82 percent saying doing so improved their happiness.

“Anyone who owns their home and is considering equity release can try SunLife’s free Equity Release Calculator, which helps estimate how much you might be able to release from your property.

“It’s worth noting, however, that equity release is a big decision, and any application will require you to speak to a financial advisor as part of the process.”

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