The importance of pensions saving has been highlighted, after research revealed the real age at which people in the UK will retire without saving for life after work is anywhere between 74 and 86.
Following the Government's decision to increase the state pension age to as high as 68, Standard Life believes many people who have no retirement savings and are hoping to rely on state benefits will find their income after giving up work will fall as low as 21% of their pre-retirement earnings.
It is estimated a male aged 27 earning an average salary of £25,800 per annum and retiring at 68 with no additional savings will have to live on 34% of their pre-retirement income, or £170 per week in state benefits. If the same person decided to defer retirement until age 79, they would receive 66%, or two-thirds of pre-retirement income, through annual increases to state benefits.
"If people rely on the state in the hope or belief that the Government will bail them out, they will either have to retire on a basic income or simply face the music and defer retirement until much later," said Andrew Tully, Senior Pensions Policy Manager, Standard Life.
"Most people in the UK would like to retire at age 65 or even earlier. To achieve this goal with a decent retirement income, private saving is essential."
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