If you're planning to retire this year, you're in luck. Research by Prudential has just revealed that those retiring this year are expected to live on an average annual income of £19,900 – the highest level seen since they first started collecting this data in 2008.
As well as being a record high, this year's retirees are expecting an income that's 10% higher than those who gave up work last year. It also marks the fifth consecutive year of growth, since expected retirement incomes hit a low of £15,300 in 2013.
Despite all this good news, however, the research further showed that 46% of those planning to retire this year feel they are either not financially well prepared for retirement, or unsure about their preparations. At the same time, just 50% believe their expected income will enable them to have a comfortable retirement, with 27% believing they don't have enough saved.
Vince Smith-Hughes of Prudential pointed out that the 10% rise is particularly impressive considering the current economic and political uncertainty, but that this uncertainty is also "impacting the confidence of nearly half of the Class of 2018 who fear they aren't financially well equipped."
He suggests that "for many, a consultation with a professional financial adviser, both when saving into a pension and considering the income options at retirement, could be a major help." If you're not sure whether you want to take that step yet, you could first have a look at our retirement guides to get a better idea of your options.
And there are many options available nowadays, thanks to the pension freedoms. If you're truly looking for a fixed annual income for life, an annuity might be for you. If you'd rather keep your pension pot invested as long as possible and take an annual income, drawdown might be a better option.
What about if you're still a bit younger, and don't think you'll ever get a retirement income as good as £19,900 per year? "The message remains the same for anyone looking to make their retirement as financially comfortable as possible – try to save as much as possible as early as possible in your working life," concludes Vince.
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