Are the days of Mass Pensioner Poverty Approaching?

The figures speak for themselves on where we stand in the UK on pension planning: the state pension is worth just 31 percent of the nation’s average earnings - less than half that of the Italians who retire with a state pension worth 68% of average earnings. Despite this, research from AXA found that some 64 per cent of UK residents intend to rely on their state pension in retirement as more and more workers move away from occupational pension schemes.

“There has to be a concerted, co-ordinated effort to make sure that people are adequately provided for, or we will inevitably be faced with a pensions dark age.”

Pensions: Looking to the Future

Recent research, commissioned by AXA showed that 64 percent of people will use only the state pension to support themselves in retirement, while almost one in five (18%) of 25-34 year-olds believe equity in their house will support them in later years - something that may not be possible if the stricter lending criteria comes into force and mortgages are harder to come by.

Read More on Retirement Planning and Pensions:

• Equity Release Explained
• Retirement Planning: Pensions and Moving Abroad
• Avoiding Inheritance Tax 

With the housing ladder potentially becoming even more difficult to jump on, just 7 percent of 18-24 year olds believe they will have any equity to support them in their later years.

The ‘buy now pay later’ culture of the ‘noughties’ has left almost a quarter (23%) of people believing they will still have to pay outstanding debts in their retirement (excluding mortgages) with almost one in five believing they will still be paying for their home (18%). 44 percent of people believe they will be able to dip in to savings in their retirement, however with a reduction in average savings seen recently [2], they may not be left with the financial cushion they are expecting.

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