Prudential Finds Brits Fear Outliving Pensions
on: May 12, 2010, 4:45 am
Prudential research findings show that more than half (59%) of
British adults fear they will outlive their pension savings, as
increasing longevity means workers are having to save more money to
fund a longer life in retirement.
The findings from the new research* commissioned by Prudential also revealed that
55% of British adults are creating 'second pensions' and supplementing retirement
income with additional savings and
investments in order to make ends meet.
Almost one in three (31%) of British adults have or are looking to boost pension
savings and create
second pensions with Additional Voluntary Contributions (AVCs) which have the same or better tax
breaks as a regular pension. 36% said they intend supplementing their pension with
additional cash savings, 17% are looking to boost pension income using stocks and
shares and 15% plan to downsize their homes and release equity.
In addition 19% of British workers would consider using paid employment to help fund
their retirement over and above their expected pension income.
Despite this, more than one in three (36%) of British adults still intend taking a
lump sum from their pension at point of retirement, reducing their retirement
income, with the average British worker looking to take around 17% of the fund from
their pension as a single tax-free payment.
Richard Harrison, Corporate Pensions Director at Prudential, said: "Increasing
longevity means workers are having to accept that pensions will be stretched over a
longer period and will therefore deliver a lower income than they might expect.
Today, a 30-year old man can expect to live until he is 86 years old**.
"This is a scary proposition for people considering how to fund their retirement
but there are plenty of options for boosting savings, including tax-efficient
Additional Voluntary Contributions. We believe everyone should see an independent
financial adviser to ensure they are saving enough to fund their life in retirement.
"For many people, taking a lump sum and also having a pension that provides
sufficient income to live a comfortable retirement will not be possible unless they
save more or retire later."
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 11th–18th March 2010 among 2010 British adults aged 18+ using an
online methodology, by Research Plus.
** Source: 2008-based cohort life expectancies from the Office for National
Statistics' Principal Projection for the UK
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