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Some 61 per cent of Britons aged under 66 have “no idea” what their retirement income will be, and those who say they do tend to overestimate it, according to a survey.
The figures suggest many people were ill-prepared for their retirement even before the latest surge in inflation put pressure on household budgets, throwing many people’s financial plans into disarray.
The results come from the Great British Retirement Survey published this week by Interactive Investor, based on polling 10,000 people.
Those ready to estimate their annual retirement income gave an average figure of £21,730, or 30 per cent more than the actual figure which is £16,540.
“We . . . see retirement outcomes being routinely compromised by just not knowing,” said Richard Wilson, chief executive. “Nearly one in four (24 per cent) of the general population say they know nothing about pensions. In a world of pensions freedoms, and after 10 years of auto-enrolment, this is a clear policy failure.”
Becky O’Connor, head of pensions and savings at the company, said: “The danger is that the cost of living crisis leads us head on into a full-blown retirement crisis. With savings increasingly cut to the bone, it’s crucial that where possible people think carefully about how they balance medium and longer-term savings goals.”
The study shows that more than half of people — 56 per cent — have curtailed savings, with 36 per cent cutting back and a further 20 per cent stopping altogether. The crisis is not sparing the better-off — 54 per cent of those on £60,000 a year and more have curtailed savings, almost as many as those earning under £30,000 (58 per cent).
Fully 32 per cent of those aged 55 have taken a lump sum out of their pension, says the survey, a decision which could reduce their future retirement income. Of these, 33 per cent have put the money into a bank or savings account, where the real returns, after inflation, are negative.
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