Analysis of 10,000 active pension planners has revealed the average retiree will receive 90 per cent less that what they need in retirement.
The analysis by Warrington-based firm Avacade Future Solutions showed that even with the state pension, retirees will not have enough money to cover the cost of living.
The average fund size is just £33,000, leaving the average pensioner with a disposable income of only £39.66 per week if they take an equal monthly instalment over 16 years in retirement.
At present, the average living cost for a pensioner is £199.752 per week, so even if they were to receive the maximum state pension of £148.40, tomorrow’s retirees will only have £188.06 to spend each week.
The average target fund size required for the sample to attain their ideal retirement is £334,102, based on the majority of the sample hoping for £12,000 per annum in retirement.
Avacade said this “worrying statistic” underlines just how many will have insufficient funds to live on in retirement.
The report stated: “The substantial discrepancy between desire and reality reveals a misinformed and subsequently unprepared pension planner, particularly when many are due to gain full access to his or her pension fund in less than six months.
“The Budget reforms announced for April will see - for the first time in UK pension history - the critical mass of pensioners handed significant financial freedom and control of the largest sum of personal finance many will ever need to manage.”
Avacade’s analysis showed that the average person only begins to review their pension at aged 51, with those in relationships more likely to plan their finances.
Lee Lummis, managing director at Avacade Future Solutions, added: “We believe the rest of the industry needs to recognise the number of people that are ill-prepared for retirement and ensure they are given the tools to secure their financial futures.”
ruth.gillbe@t.com
