The average income for people retiring this year is set to reach the highest level in the last decade, Prudential has found.
According to Prudential's Class of 2018 annual study, those retiring in 2018 are set to receive an average annual income of £19,900 - the highest level since the survey began in 2008, following five consecutive years of rising income.
The expected £19,900 income for 2018's retirees is 10 per cent higher than those who retired in 2017 who received an expected annual income of £18,100. The annual expected incomes of retirees have consistently increased since 2013 when they hit a low of £15,300. These have now also exceeded their pre-financial crisis level at £1,200 higher than the £18,700 expected in 2008.
Nonetheless, Prudential noted that despite the record income increase, almost half, 46 per cent, of people planning to depart from the workforce this year feel they are either not financially prepared for retirement or are unsure sbout their preparations.
Half, 50 per cent, believe that their expected income will enable them to have a comfortable retirement, while 27 per cent believe their funds are inadequate for retirement.
Prudential retirement income expert Vince Smith-Hughes said: “The new record high for expected retirement incomes is good news for people planning to retire this year highlighting how saving for the future is paying off. The 10 per cent rise from last year is even more impressive given the economic and political uncertainty that savers are having to cope with.
“That uncertainty is however impacting the confidence of nearly half of the class of 2018 who fear they aren’t financially well equipped. 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.
“But 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.”
Also commenting on Prudential's study, Pension Monster national accounts director Peter Bradshaw added: “Even if today’s retirees can expect a little more income in retirement, many still won’t have enough in their pension pots to enjoy retirement to the full. To avoid missing out on retirement goals, it’s crucial more is done to educate younger people on the importance of saving early on in their careers and keeping track of their funds."