The average retired person now takes home less than £16,000 per year - that’s almost £6,000 less than the average graduate - despite having worked for up to fifty years.
According to a new survey commissioned by Skipton Financial Services, the average pensioner now banks just £15,776 per year. One in six rely solely on the state pension, leaving them with just £145.40 per week. The survey also highlighted the impact of the increase in living costs on retired people.
Seven out of ten people in retirement said that they found it easier to cope 25 years ago on the equivalent of what they are earning now, and just under half said that an increase in the cost of food and utility bills has made things difficult for them.
Andrew Baker, managing director of Skipton Financial Services, said:
“It is extremely worrying that so many people are facing such a struggle in retirement, at a time when they would have hoped to be able to enjoy themselves and do some of the things they were unable to do whilst working.
“It is also troubling that a sixth of people surveyed are relying solely on their state pension, as it may be many have underestimated their expenditure in retirement and overestimated their disposable income.”
The financial worries highlighted by the research are striking. A quarter of pensioners said they find it hard to manage their bills and other outgoings, with the same percentage saying they have less than £100 in disposable income for the whole month. A third admitted that they find it hard to see it through to the end of the month, with 33% saying that they spend most days worrying about money and how they are going to survive.
Of those surveyed, 3 out of 10 didn’t save a penny towards their pension, with 45% assuming that the state pension would be enough. Baker went on to highlight the importance of preparing for retirement early in life:
“Many people understandably find it difficult to contemplate their long-term financial needs. Yet for people approaching retirement, the need to act now and ensure adequate plans are in place is significantly high.
“The key thing is to start putting money aside as soon as you can after starting employment, as often people could have more disposable income when young, before they get onto the property ladder and have children to support.”