One-fifth of retirees 'to depend on state pension'

By Tom Farley, Wed 27 Jan 2010 - Published in Pensions

Almost one-fifth of people planning to retire in the next 12 months will be relying on the state pension and their savings, research has found.

A survey carried out by Prudential discovered that 18 per cent of those leaving work in 2010 have failed to set up a private pension to provide them with an additional source of retirement income.

In addition, 31 per cent of respondents were unaware of how much the basic state pension pays, with some overestimating its value by more than Ł25 a week.

Martyn Bogira, director of defined contribution solutions at Prudential, said that people relying on the state pension as their only source of retirement income could be putting themselves in a risky financial position.

He commented: "Just one significant financial emergency, like your central heating system unexpectedly breaking down, could cause serious financial hardship for people expecting to retire on the state pension alone."

Recent figures from Confused.com showed that delaying paying into a private pension for just ten years could cut retirement income almost in half.

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