Prudential has revealed that more than a third (35 per cent) of people planning to retire in the UK this year will do so with incomes below the poverty line.
To meet its minimum income standard the Joseph Rowntree Foundation, the charity that funds a large, UK-wide research and development programme, estimates that a single person in the UK needs at least £14,400 a year, yet 35 per cent of those retiring in 2011 will have a retirement income below this level, up from 32 per cent in 2010.
Prudential's Class of 2011 study surveyed people intending to retire this year and also revealed that nearly one in five (19 per cent) will retire on an annual income of less than £10,000 a year.
Women planning to retire this year are even more likely to have incomes below the poverty line. 40 per cent of women retiring in 2011 will have a pension income of less than £14,400 compared with 30 per cent of men. Prudential's research also found that a quarter (26 per cent) of women compared with 12 per cent of men will retire this year with less than £10,000 a year to live on.
Vince Smith-Hughes, Head of Business Development at Prudential said: "Although our research shows that increasing numbers of those planning to retire will face tough financial decisions, there are many options available to boost retirement income.
"People approaching retirement should seek professional financial advice as a prerequisite to maximising their income. We would recommend that you review your finances with an adviser annually in the years immediately before your planned retirement.
"Following the simple advice to start saving as much as you can as early as you can should help to secure the retirement income you want and need. Making voluntary National Insurance contributions should also help to boost retirement income for people who have had breaks in National Insurance payment during their working lives."
Prudential's Class of 2011 research also found that those planning to retire in Wales and south east England this year are most likely to face retirement poverty. 42 per cent of this year's planned retirees in Wales will do so with an income below the poverty line with 27 per cent expecting an income of less than £10,000. In the south east of England two-fifths (39 percent) of those planning retirement in 2011 will do so with incomes below the poverty line and a quarter expects to live on less than £10,000 a year.
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Notes to Editors:
The information contained in Prudential UK's press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Survey conducted by Research Plus between 6 and 14 December 2010 among 10,143 UK non-retired adults aged 45+ including 1,005 planning to retire in 2011 using an online methodology.
According to the latest research by the Joseph Rowntree Foundation the Minimum Income Standard for the UK is currently £14,400 a year.
About Prudential:
"Prudential" is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including annuities, life assurance, bond investment, a tax calculator and retirement plans, which include pension schemes, a pension calculator and pension advice.
Prudential offers customers pensions and annuities, pensions retirement income, insurance and investment opportunities.
Ben Davies, 3 Sheldon Square, London, W2 6PR, 020 7150 3017, www.pru.co.uk
