A significant proportion of the over 40s have said they could not survive on the new state pension alone, according to new research by Partnership.
The new state pension which comes to around £8,000 per year, would force 32 per cent of the survey’s respondents to take part-time work in order to supplement their income. 38 per cent said the rising cost of living would make surviving on the state pension a ‘struggle’, 15 per cent said they would consider downsizing their property and a further 32 per cent said they would have to cut back on everything but the essentials. Just 12 per cent of those polled believed they could survive on state pension alone.
The research comes amidst countless warnings from government and industry experts that UK employees are not saving enough for their retirement, resulting in greater reliance on the state pension. A government report published last summer revealed that nearly 12 million were not saving enough, whilst a recent HSBC survey published this January revealed that nearly half of employees stopped or reduced their pension contributions during the recession.
In stark contrast to the income the state pension brings, respondents to a recent HSBC report estimated that at least £35,000 a year was needed for a comfortable retirement.
However, Ryan Taylor, Senior DC Investment Consultant at Aon Employee Benefits is concerned that none of the survey respondents felt the need to increase their pension contributions, despite acknowledging that they wouldn’t be able to survive on the state pension.
“The reality that the state will only be able to provide the bare minimum in retirement has been slowly building for some years, resulting in more people taking control of their retirement plans,” he said. “But there is clearly more work to do if none of the respondents to the survey felt that saving more in order to survive was an option.”
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