Private sector pension deficit falls, but so does expected retirement income
There was mixed news at the start of 2013 for UK pensions, as one report found that the private sector pensions deficit fell slightly but another warned that expected retirement income reached a six-year low.
The Pension Protection Fund (PPF) said that, of the 6,316 in its index, the number of private sector final-salary pension schemes in deficit fell to 5,173. This is down by 90 since December 2011. The aggregate deficit of all the schemes in deficit fell by £19.4 billion over the same period, to £269.1 billion at the end of December 2012.
In contrast, financial services group Prudential found that those retiring in 2013 expect to do so with an average income of £15,300 per year – £200 less than those retiring in 2012. Expected average retirement incomes are now 18 per cent lower than they were in 2008, although in some areas of the UK – London, the South West, Scotland, the North West and Yorkshire and Humberside – those retiring this year expected a higher average income than their 2012 counterparts had.
Prudential retirement expert, Vince Smith Hughes, warned that the fall in incomes would be compounded by rising living costs. He said: “The continuing trend is even more concerning, when you consider that rising inflation is eroding pensioners’ spending power in real-terms.
“Those who are still working should think about saving as much as possible as early as possible, to give themselves the best chance of building up a decent pension pot to help to ensure a comfortable retirement.”
Richard Place Dobson
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