Prudential reveals two in five 2012 retirees want to stay in work

Tue, 08 May 2012 15:23:59 GMT

Prudential has revealed that two in five (40 per cent) people planning to retire this year would be happy to work past 65 if they had the chance.

Prudential's Class of 2012 study, which looks at the finances and expectations of those planning to retire this year, shows that 48 per cent of men and 32 per cent of women would be happy to continue working past the standard retirement age.

The main motivation for more than two thirds (68 per cent) of this year's retirees who want to stay in the workforce past 65, is a desire to remain physically healthy and mentally active, while 39 per cent do not like the idea of retiring and just staying at home. More than half (54 per cent) claim that they enjoy working.

However, despite wanting to stay in work, only 13 per would choose to continue to work full-time with their current employer. Nearly half (49 per cent) of those retirees who want to work past 65 years old would prefer to work part-time, either with their current employer or in a new role, in order to strike a better work life balance.

More than one in 10 (11 per cent) of entrepreneurial retirees would consider starting their own business after the age of 65 or earn money from a hobby in order to keep working. Five per cent would work as charity volunteers.

Recent ONS figures show that average retirement ages are rising, with men now retiring at an average age of 64.6, compared with 63.8 in 2004, and women working until 62.3 years compared with 61.2 previously.

Vince Smith-Hughes, retirement expert at Prudential, said: "There is a new retirement reality taking shape across the UK, with thousands of people actively choosing to work past the traditional retirement age.

"The fact that so many of this year's retirees would keep working on a part-time basis is a strong indication that, for many, working is as much about staying young at heart as it is about funding retirement.

"Gradual retirement is an increasing trend among pensioners, whether this means remaining in the same job on a flexible basis or even setting up their own business. Those retiring at 65 will face an average of nineteen years in retirement which makes the financial and social benefits of working for longer an even bigger draw for a new generation of industrious retirees."

Around the country, those planning to retire this year from the East of England were the most keen to stay part of the workforce with 54 per cent saying that they would choose to work past 65 if they had the option. Half (49 per cent) of Londoners and 45 per cent of people in the South East would also like to continue to work.

However, just 29 per cent of Scots planning on retiring this year would be happy to work past 65 if given the choice, along with 30 per cent of retirees in Wales and in Yorkshire and Humberside, and only 21 per cent of those in the North East.

- ENDS -

Notes to Editors:
Online survey conducted by Research Plus between 2nd and 12th December 2011 among 9,614 UK non-retired adults aged 45+, including 1,003 retiring in 2012.
ONS www.ons.gov.uk/ons/rel/mro/news-release/average-age-of-retirement-rises-as-people-work-longer/pension-trends.html

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 services including retirement planning, life assurance, and advice on pensions.

Prudential reveals saving money is top priority for thrifty retirees

Mon, 30 Apr 2012 09:31:04 GMT

Prudential has revealed the results of new research which shows the top priority for people intending to retire this year is saving money to ensure they have enough to live on in retirement. Nearly 6 out of 10 people (57 per cent) said saving will be a top priority.

The insurer's Class of 2012 study, which looks at the finances and expectations of those planning to retire this year, also found that women are more likely than men to prioritise saving during retirement. 62 per cent of women will make this a priority compared with 52 per cent of men.

Although saving money is a key focus, those intending to retire this year are still determined to have a fun-filled retirement. More than a third (36 per cent) say that spending money on travelling the world will be a priority for them, while 43 per cent will make spending money on enjoying themselves a priority.

Giving to charity and spending money on fighting the ageing process are low priorities for this year's retirees. Fewer than 1 in 20 (4 per cent) image-conscious pensioners say that spending money on anti-ageing treatments will be a priority in retirement, while only slightly more will prioritise giving money to charity (5 per cent).

Vince Smith-Hughes, retirement income expert at Prudential, said: "Today's retirees are likely to spend longer in retirement than previous generations so it is encouraging to see that they understand the importance of saving money to ensure they can live comfortably. Saving shouldn’t be regarded as something that suddenly stops once you retire, and the current generation of retirees seems to be more aware of this than ever before.

"Saving as much money as possible, from as early an age as possible, is the best way to ensure you can afford a comfortable lifestyle in retirement. Consulting a financial adviser can also be an important step in helping retirees to make the most of their pension pots.

"It's not only about saving though; many retirees in the Class of 2012 are determined to spend money on enjoying themselves and travelling the world, which seems a fair reward for all their hard work during their working lives."

– ENDS –

Notes to Editors:
Online survey conducted by Research Plus between 2 and 12 December 2011 among 9,614 UK non-retired adults aged 45+, including 1,003 people planning to retire in 2012.

Prudential study reveals one in six will retire with no pension

Fri, 13 Apr 2012 09:55:34 GMT

Prudential's Class of 2012 study has revealed that one in six people (16 per cent) planning to retire this year will depend on the State Pension to fund their retirement as they have no other pension.

The figures come from Prudential's Class of 2012 research, which provides insights into the financial expectations of Britons planning to retire this year.

Women are more than twice as likely as men to have no pension; 20 per cent of women retiring in 2012 will depend on the State Pension compared with just 8 per cent of men.

The average person planning to retire this year will look to the State for 34 per cent of their income, with State Pension payments set to rise to £107.45 a week for single people from the 6th April 2012. Company pensions (35 per cent) are the second highest source of income and the remaining 30% comes from a mixture of savings, investments, personal pension savings, part time work and money from family members.

The Prudential research also shows that one quarter (26 per cent) of people retiring this year either overestimate by more than £500 a year what the State Pension pays, or simply do not know.

Vince Smith-Hughes, retirement income expert at Prudential, said: "While the State Pension is a safety net for pensioners in the UK, it should only ever be regarded as part of an overall retirement plan.

"For far too many people, the State Pension has become the default income option in retirement. Even those who have some private provision depend so heavily on the State that it makes up a third of their retirement income.

"Although State Pension levels will rise to £107.45 for single people per week on Friday, this will still only provide relatively low levels of income to people in retirement. It’s a weak safety net for those without any savings and the real income shock for many retirees will come when the gap between their current earnings and the State Pension becomes apparent.

"If people want to maintain their standard of living in retirement it is important that they start to save as much as possible as early as possible, and the vast majority should join company pension schemes where possible. Seeking early advice from a financial adviser should also be a prerequisite to helping people achieve the level of retirement income they want and need."

Regionally, people retiring this year in the Midlands are the most likely in the UK to rely on the State Pension (40 per cent). This compares with a quarter (28 per cent) of those in Scotland, who claim that they will be the least reliant on the state for their retirement income.

-ENDS

Notes to Editors:
Online survey conducted by Research Plus between 2nd and 12th December 2011 among 9,614 UK non-retired adults aged 45+, including 1,003 retiring in 2012.

Prudential reveals expected retirement incomes hit five year low

Wed, 11 Jan 2012 12:01:26 GMT

Prudential has revealed that people retiring in 2012 expect to live on an average annual income of £15,500 - over £1,000 a year less (6 per cent) than those who retired in 2011. The figures come from Prudential's unique Class of 2012 research which provides insights into the financial expectations of Britons planning to retire in the next 12 months.

The results of Prudential's annual survey, first carried out in 2008, show that expected annual retirement incomes have dropped by more than 16 per cent in the last five years. The Class of 2008 retirees looked forward to a total annual income, including private, company and State pensions, of approximately £18,600 - £3,100 a year more than those planning to retire this year.

In a sign of the on-going financial challenges facing those due to retire in 2012, one in five will get by on an expected annual income of less than £10,000. Meanwhile, around the country there is a regional disparity of more than £5,000 in expected retirement income. Londoners have the highest average expected incomes of £17,900, while those in Yorkshire and Humberside have the lowest at £12,800.

Fewer than two in five (37 per cent) of the Class of 2012 say that they have saved enough to secure a comfortable retirement.

Men are more optimistic about their retirement than women, with 45 per cent of men confident they will be financially comfortable compared with 31 per cent of women. However, nearly one in five (18 per cent) of those planning to retire in 2012 have no idea of the level of income they will need in order to live comfortably.

Vince Smith-Hughes, Prudential's retirement income expert, said: "The current economic climate has created the perfect storm for people in the run up to retirement. The impact of the credit crunch, banking crisis, recession, and concerns over the Eurozone, has been reflected in the fact that expected retirement income levels have hit a five-year-low.”

"It is concerning that expected retirement incomes are going down, while pensioner expenditure is going up. However, there are some practical steps that workers and imminent retirees can take to ensure a more comfortable retirement. For those who are still working, it has never been a more important time to save into a pension. The longer that savings are invested in a retirement pot, the greater the opportunity they will have to grow.”

"However, even those due to retire this year could make their retirement funds generate better incomes. Consulting a professional financial adviser can help savers to make more informed pension saving and retirement income decisions."

-ENDS-

Prudential reveals Brits hiding £4.6 billion from their partners in secret saving stashes

Tue, 22 Nov 2011 10:19:34 GMT

Prudential has revealed that fifteen per cent of Britons over the age of 40 and living with their partner choose to keep some or all of their savings hidden from their other halves.

The survey, which examines couples' attitudes to financial planning, was conducted among savers over the age of 40 and living with a partner. It found that as many as 4.5 million* Britons could be concealing savings or investments worth an average of £1,037 from their spouse or partner - a secret stash of approximately £4.6 billion.

One in ten (9 per cent) of those choosing to keep their funds hidden do so because they don't trust their other half's financial decision making, while a further quarter (23 per cent) admit that this is a security measure, in case they should split up with their partner.

Women are more likely to keep their funds hidden from their partner, with 18 per cent admitting to hiding savings averaging £1,002. This compares with 12 per cent of men, who conceal an average fund of £1,072.

A prudent two in five (42 per cent) secret savers plan to use the money to supplement their retirement income - even though 20 per cent of those surveyed admit to never having discussed financial planning for retirement with their spouse or partner.

Vince Smith-Hughes, head of business development at Prudential, said: "By harbouring secret stashes of money, many couples are failing to plan sufficiently for their joint retirement. While it is understandable that some people in relationships want to be able to spend their own money, it is important for couples to have regular and open discussions about financial planning for the sake of maximising their retirement incomes. Only then can they decide how to make the best possible joint provision for the future.

"Consulting a financial adviser together is an important part of this on-going dialogue and can help couples to secure the income and lifestyle they expect in retirement."

Prudential's survey also found that nearly a fifth (17 per cent) of Britons feel uncomfortable about discussing financial matters with their partner. While two thirds (67 per cent) of couples say they have not received professional financial advice together in the past five years, one in 10 people claim that either they or their partner has independently visited an adviser within the past five years.

– ENDS –

Note to Editors
- Research by Vision Critical, on behalf of Prudential, was conducted among a sample of 2,003 people, including 501 retired, 324 semi-retired and working part-time, and 1,178 aged 40+ working full-time and living with their partner/spouse.
- According to ONS statistics there are 30,003,700 people in the UK aged 40+. Numbers included in this release have been calculated using this base figure.
*15 per cent of those polled said that they have savings and investments that they started without the knowledge of their partner. Assuming a representative sample, 15 per cent of the UK population over the age of 40 is approximately 4.5 million.

Prudential reveals research on the importance of women's retirement plans

Wed, 02 Nov 2011 15:06:26 GMT

Prudential has revealed that nearly half (46 per cent) of women over the age of 40 who live with a partner have no pension of their own, according to new research into couples' attitudes to retirement.

The extent of women's reliance on a partner's pension and the State is not the only shock finding from the research, which also highlights that many UK couples could be sleep-walking into retirement poverty as they have no idea what pension income they will need to live on.

More than half (56 per cent) of couples aged over 40 have not worked out how much money they will need to live on in retirement, with two in five (40 per cent) admitting to having no financial plans in place for life after work.

British couples also seem reluctant to discuss with each other the finances that will support them in later life. One in five couples (20 per cent) admit to never having discussed joint retirement financial planning, while only half of those who have already retired made a joint decision about the annuity they bought.

Vince Smith-Hughes, head of business development at Prudential, said: "Pensions may not seem like the most exciting topic for a couple in their forties to be discussing, but couples who have not put time aside to discuss their retirement income plans run the risk of spending their later lives worse off than they had expected."

In regard to retirement planning, Smith-Hughes stressed how important it is for women to discuss their future finances with their partner, and preferably with a financial adviser too. According to Smith-Hughes, women who don't engage in these discussions could find themselves in financial trouble, especially if they outlive their loved one.

Smith-Hughes continued: "People may feel they can't afford to significantly boost their retirement savings in the current financial climate, but taking even the smallest of steps can have a positive impact. Joining a workplace pension scheme, considering a joint life annuity, so the income will continue after one partner dies, and topping up National Insurance contributions are all options which can increase income in retirement. These crucial issues should be discussed between couples and, in turn, with their financial advisers."

- ENDS -

Note to Editors
Research by Vision Critical, on behalf of Prudential, was conducted among a sample of 2,003 people, including 501 retired, 324 semi-retired and working part-time, and 1,178 aged 40+ working full-time and living with their partner/spouse.

PruHealth partners with the National Trust to organise walking festival

Fri, 21 Oct 2011 11:36:05 GMT

PruHealth and the National Trust have reported that more than 32 million people plan to head outdoors to enjoy an autumn family walk, new research has shown.*

Over 16 million (33%) say it's the season's beautiful colours that makes autumn walking so special.

To celebrate the season and to promote the virtues of being active, the National Trust is holding its first ever National Festival of Walking this October half-term, with at least 50,000 people expected to take part.

The National Trust has partnered with a leading health insurer PruHealth to organise around 1,000 events all over the country, from barefoot walks to silly walks, adventure walks to wildlife walks.

The festival is the perfect opportunity for the public to get outdoors and have fun, especially with 41% of adults saying they don't spend enough time with their families. **

William Wake from the National Trust's outdoors team said: "From leaf kicking to finding conkers and wrapping up warm, there is something simply delicious about an autumn walk.

"We're asking people to tell us what they think makes autumn walks so special, to see if we can identify the perfect formula for a family outing this half term."

Events are taking place at 180 sites in England, Wales and Northern Ireland from 22-30 October.

There will also be more than 800 free walking routes available to download from the National Trust website at www.nationaltrust.org.uk/walks.

People can also log their own favourite walks on an interactive map on the website, and join a debate on the best things about autumn walking on the National Trust's Facebook pages or on Twitter using #walkfest from October 20.

Dr Katherine Tryon, Head of Clinical Vitality for PruHealth, added: "The Walking Festival is a great way to get active with the whole family, and there are walks to suit all fitness levels.

"Government guidelines*** recommend we walk 10,000 steps a day, and just thirty minutes of brisk walking each day can help reduce the risk of coronary heart disease, maintain a healthy weight, improve self-esteem and reduce symptoms of depression and anxiety.

"The average walk at the National Trust is three to four miles, which is approximately 6,000-8,000 steps - well on the way to reaching the target while having a fun day out. When you're healthy, you can get more out of life - come along and see."

Notes to editors:
* Total sample size of family walks survey was 2065 adults. Fieldwork was undertaken between 7th - 10th October 2011. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+). Based on a UK population of 49,122,200 reported by the Office of National Statistics as of June 30 2011. 66% of adults = 32420652 and 33% of that number is 16210326. Calculations carried out by the National Trust. Full results from YouGov available on request from the National Trust Press Office
** http://www.charitytimes.com/ct/Brits_are_lonely_isolated.php
** http://www.nhs.uk/Livewell/loseweight/Pages/10000stepschallenge.aspx

About PruHealth:
PruHealth was launched into the UK market in October 2004 as a joint venture between Discovery and UK insurer, Prudential, in response to a growing need for consumer-directed health insurance products. Customers can get a health insurance quote online on the PruHealth website.

PruHealth has received several industry awards. Most recently being the Best PMI Provider at the 2011 Moneyfacts Awards, as well as the Most Trusted Private Medical Insurance (PMI) Provider at the 2010 Moneywise Awards, the Best PMI Provider at the 2009 Moneyfacts Awards, Best use of Marketing to Intermediaries (Brokers) at the 2010 Health Insurance awards and the award for the Best Individual PMI provider at the 2010 Health Insurance Awards and 2010 Cover Excellence awards.

Prudential reports Britons favour spending on holidays over saving for retirement

Wed, 12 Oct 2011 15:13:57 GMT

Prudential has revealed that nearly three million working age adults will prioritise going on holiday over continuing to save for their retirement as their finances are squeezed.

The survey asked non-retired adults in the UK to outline their spending priorities when faced with a reduction in monthly expenditure as incomes are frozen for many and living costs increase.

Prudential's research also found that an estimated 2.5 million Britons (or 10 per cent of those who have started saving for retirement would, if forced to make the choice, continue to spend money on nights out with friends and trips to the cinema ahead of maintaining payments into their pensions.

In a similar vein, more than 2 million would choose clothes shopping or going to the hairdresser ahead of payments into their retirement savings.

The figures highlight how saving for retirement is less of a priority for many in the current financial climate. Having previously revealed that more than 1 in 3 non-retired UK adults have no private or company pension, Prudential's research has also found that almost a quarter wait until they are 31 years old before paying anything into a pension.

Vince Smith Hughes, Head of Business Development at Prudential, said: "Given the choice, many of us would opt for the immediate benefits of a holiday or a night out with our friends over saving for retirement. However, I'm sure we would all like to be able to continue topping up our tans occasionally or going out for meals after we have retired. So it is really important to strike a balance and keep building up a pension that can support the lifestyle we want to have in later life.

"As people tighten their belts it is important to think about the long-term impact of financial decisions and spending patterns. Those looking to maximise their retirement income should start saving as much as possible as early as possible in their working lives. Even small contributions can make a significant difference to a pension if invested early. And a consultation with a professional financial adviser will help you make the right long-term and short-term financial decisions."

Notes to Editors
Prudential's insights based on an online survey of 1,602 non-retired adults in the UK, conducted by Research Plus in August 2011. The numbers of non-retired adults in each category above have been estimated using the Office of National Statistics data relating to the number of non-retired UK adults (37.73 million).

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 private pensions, retirement planning, life assurance, advice on money saving and pension advice.

Prudential reveals more than a third put their pension savings on hold

Mon, 10 Oct 2011 10:56:34 GMT

Prudential has revealed new research which shows more than a third (35 per cent) of British adults who are yet to retire have stopped paying into their pension pots.

The results of the nationwide study show that one in three (33 per cent) of those who have put pension payments on hold have done so because they are out of work, while over a quarter (27 per cent) say that they can no longer afford the contributions.

More than two-fifths (43 per cent) of those who have stopped paying into their pensions do not plan to start again, despite the long-term impact it will have on their retirement income.

Prudential's calculations show that irregular contributions could reduce the values of savers' pensions by thousands of pounds. In fact, a saver who misses a year of gross contributions of £2,400 could see their final pension fund reduced by £7,000*.

Vince Smith-Hughes, head of business development at Prudential, said: "Tightening your belt when times are hard is sometimes necessary, and putting pension contributions on hold might seem an easy way to save money; however, neglecting pensions today means throwing money away tomorrow, as savers will miss out on perks, such as tax relief and employer contributions.

"Abandoning your pension pot really should be a last resort when times are tough. By getting into the routine of saving into a pension as early as possible, savers will be able to ensure the comfortable retirement that they deserve."

- ENDS -

Notes to Editors
Prudential’s insights based on a survey of 1,602 non-retired adults in the UK, conducted by Research
Plus in August 2011.
*Statistics are based on Prudential's Flexible Retirement Plan, and assume a 7 per cent growth.

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 private pension products, life assurance, advice on money saving and pension advice.

Prudential reveals one in three UK workers don't have a pension

Thu, 15 Sep 2011 15:50:02 GMT

Prudential has revealed that more than one in three (35 per cent) workers in the UK admit that they don't have a pension, meaning that they will have to rely on the State Pension and any savings in retirement.

The survey of 1,600 working adults also found that those who do contribute to a company or private pension pay in an average of 6.2 per cent of their annual incomes. Women are far less likely to save for their retirement with 41 per cent saying they do not have a pension, compared with 29 per cent of men.

To make matters worse for those who do not save into a pension fund, as well as facing a sharp drop in income at retirement, they are also missing out on significant tax relief during their working lives. Office of National Statistics figures suggest that the average worker in the UK earns nearly £1 million over the course of their working lives. An individual making the average pension contribution of 6.2 per cent of this income could receive a total of more than £15,000 in pension tax relief.

While the average tax relief on pension contributions is £334 per year for a person paying the basic rate of tax, higher rate taxpayers stand to lose substantially more by not paying into a pension scheme.

Vince Smith-Hughes, head of business development at Prudential, said: "Failing to save into a pension means not only having to rely solely on the State Pension in retirement, but also missing out on the 'free money boosts' which come with pensions, such as tax relief and employer contributions.

"Making regular pension contributions is a vital part of securing a comfortable retirement. Although saving for retirement may not be a priority for young people, the more money which is stashed away from an early age, the more likely that significant rewards will be reaped later in life.

"When coupled with the benefits of any additional employer contributions or gains through fund performance, a pension is the best way of saving for retirement, for many people. In order to maximise pension benefits, to understand the impact of tax relief, and ultimately to secure a decent retirement income, it’s important to seek professional financial advice."

- Ends -

Notes to Editors
- Prudential's insights are based on a survey of 1,602 non-retired adults in the UK, conducted by Research Plus in August 2011
- An individual earning £60,000, and making a typical pension contribution, will receive £2,480 a year in tax relief; someone earning £100,000 will receive £4,133. Analysis of lifetime earnings and total UK working population based on the Office for National Statistics 2010 Annual Survey of Hours and Earnings (ASHE)
- Tax relief calculation based on median earnings taken from the 2010 ASHE across an individual's lifetime, based on current tax rates and thresholds, and a typical pension contribution of 6.2%

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 pensions, life assurance, advice on planning for retirement, which includes pension advice and annuity service.

Prudential reports pensioner inflation to cut spending power 60 per cent over a 20 year retirement

Mon, 05 Sep 2011 11:07:39 GMT

Prudential has revealed that pensioners retiring this year on a fixed income could lose 60 per cent of their spending power over the course of a 20 year retirement.

Analysis from Prudential shows that the average person retiring in 2011 expects an annual income of £16,600, but if that income remains fixed it will be worth a mere £6,700 in today's money in 20 years' time - effectively a £10,000 pay cut. In fact, assuming that inflation remains at its current level, pensioners will need their retirement income to more than double (to over £40,000), if they expect to maintain their standard of living for the next 20 years.

Pensioner inflation or 'Silver RPI' is higher because people of retirement age spend a greater proportion of their income on goods and services that are subject to the highest rates of inflation - such as food and fuel.

Vince Smith Hughes, Head of Business Development at Prudential, said: "Pensioners on a fixed income are particularly vulnerable when it comes to rising living costs and our figures demonstrate the true extent to which 'Silver RPI' impacts on the spending power of those in retirement.

"There are alternatives to a fixed income in retirement, for example choosing a flexible income plan that has the potential to grow could help many retirees to mitigate the effects of increasing living costs. We recommend that people approaching retirement seek professional financial advice to help them understand all the retirement income options open them."

Research by Age UK recently found that 'Silver RPI' has averaged 4.6 per cent a year since January 2008 - nearly 50 per cent more than the 3.1 per cent average annual inflation recorded by the Retail Prices Index (RPI) over the same period.

- ENDS -

Notes to Editors:
* Prudential's Class of 2011 retirement research, a survey conducted by Research Plus between 6 and 14 December 2010 using an online methodology among 10,143 UK non-retired adults aged 45+ including 1,005 planning to retire in 2011
** Pensioner inflation figures based on data from - 'Age UK Enterprises Silver RPI - Measuring the true impact of inflation on those in later life' – 11 May 2011
http://www.ageuk.org.uk/Documents/EN-GB/silver_rpi_wave_3_white_paper.pdf?dtrk=true

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 money advice, life assurance, advice on planning for retirement, which includes pensions and annuity service.

Prudential reports pensioners set to lose £2.9 billion of spending power over next 12 months

Tue, 23 Aug 2011 11:01:33 GMT

Prudential has reported that pensioners in the UK with additional savings held in cash ISAs, savings accounts and current accounts could see their spending power fall by an average of £278 each in the next 12 months, according to new analysis. The calculations show that the combined effects of increased inflation and low interest rates will erode pensioner buying power by a total of £2.9 billion in the coming year.

Pensioners are seeing their cost of living rise 44 per cent faster than the current rate of inflation. This is because a greater proportion of their income is spent on goods and services with prices that are rising ahead of inflation, like fuel and food.

The average pensioner has £19,664 in additional savings, but is likely to see their purchasing power fall considerably as the gap between the interest rates paid on savings and the rate of Silver RPI eats into the value of cash nest eggs in real terms.

According to recent research by Age UK, the average annual inflation recorded by the Retail Prices Index (RPI) has been 3.1 per cent in the period since January 2008. Silver RPI over the same period has averaged 4.6 per cent - resulting in an annual rate of inflation for pensioners that is nearly 50 per cent higher.

Vince Smith Hughes, Head of Business Development at Prudential, said: "Low interest rates and rising Silver RPI mean that many pensioners are particularly feeling the squeeze, and for those who rely on interest paying savings accounts to top up their income the challenge is even greater.

"As most people in Britain feel the financial pressure of rising living costs, pensioners on fixed retirement incomes are facing even higher levels of inflation and are suffering disproportionately.

"We strongly encourage people to speak to a financial adviser to ensure they are making the best use of income-generating investments, bonds and pension funds where relevant, in order to ensure their income has the potential to rise and combat increasing inflation and living costs."

- ENDS -

Notes to Editors:
Pensioner inflation figures based on data from 'Age UK Enterprises Silver RPI - Measuring the true impact of inflation on those in later life' – 11 May 2011.
(www.ageuk.org.uk/Documents/EN-GB/silver_rpi_wave_3_white_paper.pdf?dtrk=true)

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 money advice, life assurance, bond investment, a tax calculator and retirement plans, which includes pensions and pension service.

Prudential reports retirement income worries and lump sum regrets for pensioners

Thu, 28 Jul 2011 15:08:32 GMT

Prudential has conducted new research that shows more than two in five pensioners (43 per cent) say they are living a 'cautious' retirement as they worry about having sufficient long-term income to get by.

However, despite concerns about making their retirement pots last, the majority of pensioners still take a tax-free lump sum from their pensions when they retire. Nearly eight out of 10 (79 per cent) of those drawing a company or private pension in 2011 took a lump sum from their fund at retirement, compared with 76 per cent three years ago.

The research, exploring the retirement reality for pensioners in 2011, also found that one in 10 (10 per cent) of those who did take a tax-free lump sum either said they now regret the decision or that they had not fully understood the long-term impact it would have on their retirement income.

For many, the option to take a lump sum at the point of retirement is the most tax-efficient way to access some of their pension fund. However, the way in which pensioners use the money from their lump sum is often shaped by concerns around long-term pension income. More than half (52 per cent) of those who had taken a lump sum put some of the money in a savings account and just over a quarter (26 per cent) invested in stocks, shares or investment trusts.

Vince Smith Hughes, Head of Business Development at Prudential, said: "Most people with a company or private pension fund choose to take a tax-free lump sum at retirement, and for many this proves to be the right thing to do. However, some pensioners are beginning to regret the way they used the tax-free cash. The days of buying a shiny new car or going on an once-in-a-lifetime holiday may be gone, to be replaced by making savings and investments with the lump sum to supplement retirement income.

"There is no one-size-fits-all answer to the financial choices that people need to make when they retire. For example, spending the money from a tax-free lump sum and taking a level annuity with the balance of your fund will effectively fix the level of your retirement income - and for some this may provide the stability they need. Others may wish to explore more flexible retirement products that take into account the effects of inflation.

"There does, of course, need to be a balance. Many people want to spend their at-retirement lump sum in a way they have looked forward to for many years. Those who are planning to retire in the near future and are uncertain about their financial choices should seek regular professional financial advice, to ensure they secure the long-term retirement income they need."

Prudential's research has previously found that of those who took a lump sum from their pension pot at retirement, a third (33 per cent) used all or part of it for home improvements, 31 per cent paid for a holiday, and two in five (19 per cent) bought a new car.

- ENDS -

Sources:
- Retirement attitudes and pension lump sum research 2011 conducted online by Research Plus
between 24 and 28 February 2011 among 1,001 UK retired adults.
- Pension funds lump sum research 2008 conducted online by YouGov between 2 and 6 May 2008
among 4,051 UK adults, 1,003 of whom were retired.

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 plan and pension annuity tips.

Prudential reveals retirement income gender gap is £6,500 a year

Tue, 28 Jun 2011 11:27:07 GMT

Prudential has announced that men retiring in 2011 expect to receive 50 per cent more pension income than women, according to new Prudential's Class of 2011 research.

Prudential's Class of 2011 research surveyed people planning to retire this year and found that the retirement income gender gap is £6,500. The average woman retiring this year expects an annual income of £12,900 compared with an average expected male income of £19,400.

There is some good news for women though as the retirement income gender gap has shrunk since last year when Prudential's study showed a £7,400 gap with women expecting incomes of £12,200 while men looked forward to £19,600. However, women who planned to retire in 2009 expected an annual retirement income of £13,700.

The research found that people planning to retire in 2011 expect to have an average income of £16,600 – marginally higher than 2010's figure of £16,500.

Vince Smith-Hughes, head of business development at Prudential, said: "It is good news that average retirement incomes for women have risen, but unfortunately the gender gap remains stubbornly wide.

"There are a number of actions that women can take to help to boost their retirement income. For example, it is a good idea to maintain pension contributions during any career breaks and to explore making voluntary National Insurance contributions after returning to work.

"It is imperative for anyone looking to secure sufficient retirement income to start saving as much as they can, as early as they can and to seek professional financial advice when they are planning to retire."

The retirement income gender gap is at its widest in the South West of England where retired women expect £11,700 a year less than men. Meanwhile in the South East of England the expected retirement incomes for men and women are essentially equal.

The Prudential study also found that 28 per cent of women planning to retire this year have no savings in private or company individual pension schemes compared with just 10 per cent of men.

Notes to Editors:
Prudential's Class of surveys were conducted by Research Plus using an online methodology: 2011 survey conducted 6-14 December 2010 among 10,143 UK non-retired adults aged 45+ including 1,005 planning to retire in 2011. The 2010 study was conducted 3-10 December 2009 among 6,073 UK non-retired adults aged 45+ including 1,001 planning to retire in 2010. Class of 2009 study conducted 10-18 November 2008 among 7,685 UK non-retired adults aged 45+ including 1,000 planning to retire in 2009.

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 plan and pension annuity tips.

Prudential reveals two in five planning to retire in 2011

Wed, 27 Apr 2011 15:42:53 GMT

Prudential has announced that two in five people are planning their retirement for 2011, even though many have received no advice or have relied solely on non-professional advice.

Two in every five people planning to retire in 2011 will do so having relied on non-professional advice as their main financial information source in the run up to retirement. Prudential's Class of 2011 research studied the financial plans of this year's retirees and found that 43 per cent have received no professional advice or relied on the internet or the media for most of their pension advice.

However, more than a quarter (28 per cent) of people intending to retire this year received most of their financial information from an IFA - a figure that remains unchanged since last year. But the study shows there is an increasing trend for people to conduct their own research before seeking pre-retirement financial advice. Half of those who said that an IFA was their main source of retirement income advice had also carried out research online and via the media - an increase from one in three in 2010.

Prudential also found that nearly one in ten (9 per cent) are relying on employers for pre-retirement financial advice advice while another 16 per cent are putting their faith in a mix of friends and family, pension providers and banks.

Russell Warwick, distribution strategy director at Prudential, said: "These results show that there is a genuine advice gap for people in the run-up to retirement. The majority of people due to retire this year will miss out on professional advice and could potentially be making mistakes when planning for their retirement income.

"It is imperative for people looking to secure their retirement income to start saving as much as they can as early as they can and in the years immediately prior to retirement I would also recommend a consultation with a professional adviser on an annual basis.

"Our research has also found that the numbers seeking financial advice prior to retirement in 2011 have not changed since last year. This highlights the work that we as an industry will need to undertake to increase consumer understanding of the value that advisers can add in the run up to the implementation of the Retail Distribution Review next year."

According to Prudential's research, men are more likely to seek financial advice than women in the run up to retirement. Around 34 per cent of men intending to retire this year cited IFAs as their main source of advice, compared with 24 per cent of women.

People in Yorkshire & Humberside (34 per cent) and Londoners (32 per cent) are the most likely to have received the majority of their retirement advice advice from a professional adviser.

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, pension scheme, a tax calculator, retirement plans and a pension guide.

Prudential offers customers pensions and annuities, pensions retirement income, insurance and investment opportunities.

Notes to Editors:
Survey conducted using online methodology 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.

Prudential reveals more than a third are delaying retirement

Tue, 26 Apr 2011 12:20:17 GMT

Prudential has revealed that more than a third of people are delaying their retirement and putting their dreams on hold.

More than a third (38 per cent) of people due to retire in 2011 are cancelling their plans and delaying retirement and working longer, and a significant proportion (22 per cent) of these are doing so because they can't afford to stop working.

The findings, from Prudential's Class of 2011 study, revealed that those delaying retirement this year for financial reasons, had, on average, hoped to stop working at age 62 but now expect to be 68 years old before they can finally take up their state pension. The study, now in its fifth year, questioned people who had planned to retire during 2011.

Two fifths (40 per cent) of those delaying retirement in 2011 due to the financial strain that it will create, believe that they will have to keep working until they are 70 years old, or older, in order to retire with a comfortable income.

Prudential's study shows that of all those planning to retire in 2011, 22 per cent now say they can't afford to - a figure that has increased since 2010 when it was 15 per cent. In addition, 16 per cent of those planning to retire in 2011 do not want to quit working.

Vince Smith-Hughes, head of business development at Prudential said: "The only realistic option for those who want to avoid having to delay their planned retirement is to start saving as much as they can as early as they can.

"However, as inflation reaches 5.5 per cent and disposable incomes are reduced, Prudential's research shows that people are postponing retirement to either build up their pension pots further or simply to continue in a job that they enjoy. When economic factors are combined with changes in legislation, such as the abolition of the Default Retirement age and an increasing trend of choosing to continue at work, it is easy to understand why more people are postponing their retirement plans.

"Seeking professional financial advice is a prerequisite to securing the retirement income that people need and we recommend that those who are approaching their planned retirement age should speak to a financial adviser on at least an annual basis."

Scotland has the lowest percentage (31 per cent) of people who have delayed their retirement plans in 2011, whereas the South West has the greatest proportion of people (44 per cent) now looking to put-off their scheduled retirement until a later date.

ENDS

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.

Notes to Editors:
Survey conducted by Research Plus using an online methodology between 5 and 14 December 2010 among 10,143 UK non-retired adults aged 45+ including 1,005 retiring in 2011.

In the year to February, RPI annual inflation was 5.5 per cent, up from 5.1 per cent in January - www.statistics.gov.uk/cci/nugget.asp?id=19.

Prudential reveals number of poverty line pensioners on the rise

Thu, 31 Mar 2011 16:38:44 GMT

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.

- ENDS -

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.

Prudential research finds most new pensioners considering working beyond retirement

Wed, 02 Mar 2011 11:29:16 GMT

According to figures from the latest Prudential Class of 2011 research, 62% of those who had planned to retire in 2011 would consider postponing their pension and continuing to work in order to boost their retirement income.

Of those considering putting off their retirement, 46% said they will definitely have to continue to work in order to supplement their pensions or build up their savings further.

Prudential's Class of 2011 study surveyed people intending to retire during the forthcoming year. The findings highlight the growing trend for part-retirement in the UK as pensioners face up to the reality of funding a far longer period of retirement.

Of those initially intending to retire in 2011 but now planning to continue working, 53% said they would like to stay with their current employer - either working part-time or fulltime - while 11% plan to seek part-time work with a new employer.

The survey results also show that 32% of those due to retire in 2011 would consider working for up to another two years if it guaranteed them greater retirement income.

22% reported they would work for another two to five years, while 8% would be prepared to work for five to 10 years to boost their retirement pot.

Vince Smith-Hughes of Prudential said: "The only realistic option for people who want to avoid having to continue to work beyond the traditional retirement age, is to save more and to start saving earlier. Seeking advice from a financial adviser should be a prerequisite to ensuring you achieve the level of pension income you want and need.

"Since 2007 studies by Prudential have identified part-retirement as a growing trend – a trend that looks set to continue in 2011. This year will see the phasing out of the default retirement age, making it easier for those wishing to stay on at work. Additional retirement income is also becoming more important as the security of a defined benefit pension scheme disappears for many people.

Prudential's research also showed that 19% of those planning to retire this year are not willing to work any longer, even if that decision means they will struggle financially in years to come. Only 12% of the Class of 2011 reported that they have ruled out working beyond their planned retirement because they feel that they have already saved enough for a comfortable retirement.

The number of new pensioners considering working beyond their planned retirement age in 2011 (62%) has increased since last year when 57% of those questioned said that they would consider continuing to work in return for a higher retirement income.

ENDS

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. Full consumer product information can be found at on the Prudential website.

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.

Prudential offers customers pensions and annuities, pensions retirement income, insurance and investment opportunities.

Prudential reveals results of Class of 2011 study

Mon, 24 Jan 2011 16:11:36 GMT

Prudential has revealed the results of its Class of 2011 study, which investigates how much pension money this year's retirees will have to live off.

The average person retiring this year expects to have an estimated total annual income of £16,559 including any private pensions and State Pension, according to figures from Prudential's Class of 2011 survey. One in five (19 per cent) of 2011's new pensioners expect to live on less than £10,000 a year.

The Class of 2011 is marginally better off than those who retired in 2010 when the average estimated income for those planning to retire was £16,509. By comparison average estimated retirement income in 2009 was £17,779 and £18,663 in 2008. The figures also show that the average age of those expecting to retire in 2011 is 60, while 19 per cent of this year's expected retirees will do so below the age of 55.

Prudential welcomes the fact that expected incomes have stabilised after two years of falls but is urging savers to take increased responsibility for retirement planning by starting to save as early as possible and increasing the amounts they save into pensions year on year.

Results of the survey suggest that in light of the current economic climate just two in every five people (39 per cent) believe they have saved enough for a comfortable retirement.

Nearly half (45 per cent) are convinced they have not saved enough while another 16 per cent do not know whether their savings will be sufficient, the study shows. Men are more optimistic than women with 48 per cent of males believing they have saved enough compared with 30 per cent of females.

Vince Smith-Hughes of Prudential said: "The fact that expected incomes for those retiring in 2011 have stabilised after two years of decline is good news.

"The Class of 2011 survey and previous studies conducted since 2007 by Prudential underline the message that the best option is to save more and to start saving earlier. Seeking early advice from a financial adviser should be a prerequisite to ensuring you achieve the level of pension income you want and need."

The Prudential study shows people retiring in Yorkshire and Humberside and the North West in 2011 are the most optimistic about their savings - 45 per cent of those in Yorkshire and Humberside believe they have saved enough with their pension plan while 44 per cent in the North West are confident about having a comfortable retirement.

However just 20 per cent of people retiring in Wales in 2011 are confident about a comfortable retirement and only 28 per cent of Londoners believe they have saved enough.

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. Full consumer product information can be found at www.pru.co.uk.

Survey conducted by Research Plus between 5 and 10 December 2010 among 10,143 UK non-retired adults aged 45+ including 1,005 planning to retire in 2011 using an online methodology.

Prudential offers customers pensions and annuities, pensions retirement income, insurance and investment opportunities.

Prudential UK enters into buy-in agreement with GlaxoSmithKline

Tue, 23 Nov 2010 11:24:26 GMT

Prudential UK has entered into two bulk annuity buy-in contracts with the Trustees of the GlaxoSmithKline ("GSK") Pension Scheme and the GSK Pension Fund for a tranche of pensioner members within their defined benefit pension schemes. The transactions cover around 15 per cent of GSK's UK defined benefit pensioner liabilities and have an aggregate value of approximately £900 million.

Under the terms of the agreement, GSK has purchased bulk annuity policies from Prudential which will take on responsibility for a portion of the pensioner benefits payable by the Trustees of the GSK Pension Scheme and Pension Fund. GSK will continue to administer the Scheme and Fund and the terms of the pension payments made to its scheme members will remain unchanged.

Andrew Crossley, deputy chief executive, Prudential UK & Europe, said: "Prudential has a unique set of capabilities in the annuities market including extensive longevity experience, a superior investment track record and operational scale. Our strategy for bulk annuities is to participate selectively in the market and only enter into transactions which meet our strict requirements for return on capital. This agreement demonstrates our ability to complete complex and innovative transactions within the bulk annuity marketplace.

"Our financial strength and strong track record continue to be significant factors for pension scheme trustees looking for a safe and secure home for their pensions. We believe that the GSK Pension Scheme and Pension Fund will benefit from our expertise and experience in the pensions and annuities markets."

This contract will be recorded for accounting purposes within Prudential's fourth quarter results for 2010.

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, bonds, pension funds, a tax calculator and retirement plans.

Prudential offers customers pensions and annuities, pensions retirement income, insurance and investment opportunities.

Note to Editors:
The Prudential / GSK agreement is a 'buy-in' of annuities rather than a 'buy-out' of pension liabilities. A 'buy-in' is where a group annuity contract is bought as fund investments and held by the Trustees. It belongs to the pension fund, not individual members. The Trustees hold the policy as a fund asset to meet its liabilities, and receives income from it to pay pensioners.

In effect, the GSK Pension Scheme / Fund have chosen to invest in an annuity policy to hold alongside their other assets. Individual scheme members will not become Prudential policyholders as they would in a 'buy-out'. Instead, the Pensions Scheme / Fund will receive payments from Prudential which match the money the Trustees pay out to pensioners.

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