According to Fidelity, the average UK worker will retire on less than the minimum wage. They have calculated that someone retiring on the current national average wage of £22,900 will receive a retirement income of £9,618 or £185 per week before tax. This compares with the £202 per week that full time workers receive on the minimum wage. Fidelity's study found that the UK could become a two-tier nation, where there is a huge gap between members of defined benefit schemes and defined contribution schemes. Defined benefit scheme members are likely to receive 81% of their expected final earnings, while defined contribution members are likely to receive only 38% of their final earnings.
Our view
There are only so many times we can write in this section about the need to save. Most people spend huge amounts on cars, petrol, cigarrettes and holidays, mounting to hundreds of pounds a month and then pay only 'lip service, to their pensions. People who are sensible will not retire in poverty, people who do not save will regret the fact that they chose to live for today. We all should "live for today but still have one eye on tomorrow".
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