People retiring this year have the highest typical expectations for their incomes in at least a decade, a report has found.
On average, those retiring in 2018 expect to have an income of £19,900 a year - the highest figure since the research from Prudential started, in 2008.
The "class of 2018" anticipates having an average income which is 10 per cent higher than those who ended their working lives in 2017, whose average expected annual retirement income was £18,100.
Expected retirement incomes are now £1,200 higher than the £18,700 people retiring in 2008 were anticipating.
The report found expected retirement incomes have been on the increase each year since 2013, when they hit a low of £15,300.
A pensions revolution has taken place since Prudential first launched its research in 2008, with the launch of automatic enrolment into workplace pensions in 2012 and more recently the pension freedoms for over-55s, meaning people are no longer required to buy an annuity when they retire.
But "gold-plated" final salary pension schemes which promise a certain level of income have also become more scarce in recent years.
The research found that despite the anticipated income boost, nearly half (46%) of people planning to retire this year feel they are either not financially well prepared for retirement or are unsure about their preparations.
Meanwhile, only half (50%) believe their expected income will enable them to have comfortable retirement while 27% 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% 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."
He continued: "The message remains the same for anyone looking to make their retirement as financially comfortable as possible - try to save as much as possible as early as possible in your working life."
Some 1,000 people planning to retire in 2018 were surveyed for the report.
Here is how expected retirement incomes have changed since 2008, according to Prudential's research:
2008 - £18,700
2009 - £17,800
2010 - £16,500
2011 - £16,600
2012 - £15,500
2013 - £15,300
2014 - £15,800
2015 - £17,000
2016 - £17,700
2017 - £18,100
2018 - £19,900
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel