Mind the Generation Gap!

45 to 55 YEAR olds expect to retire on a fifth less than this year’s retirees.

The next generation of retirees expect to be worse off in retirement by almost a fifth (18 per cent) compared with those leaving the workplace this year, according to new research by Prudential. 
The insurer’s study revealed that people aged between 45 and 55 expect to work until they are 65 years old and estimate that their average annual retirement income will be £14,000 a year when the time comes for them to stop work. In contrast, figures from Prudential’s study of the ‘Class of 2015’ – those planning to retire this year – show an expected average annual income of £17,000, leaving a generation gap in retirement income of £3,000 a year. 

Just 27 per cent of the next generation of retirees, those aged 45 to 55, believe their pension will provide them with sufficient income to enjoy what they consider to be a comfortable life in retirement. This compares with half (50 per cent) of those planning to retire this year. 

Prudential’s research also found that the generation gap in retirement income comes as no surprise to the next generation of retirees. Seven in 10 (70 per cent) of those aged 45 to 55 say that they expect to have a lower standard of living than people currently in retirement, while only six per cent expect their standard of living to be better. 

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