What is your projected retirement income and how does it realistically compare to your current income?
The important thing about income isn’t just the amount; it’s also how much you can spend and any necessary expenses you may have.
By this definition, the difference between current average earnings and current average retirement incomes will come as a shock to millions of British people today.
To determine whether you are saving enough for retirement, you can look at the latest UK statistics. Get advice on pensions from a professional who is precisely matched to your needs. Getting started is easy, fast and free.
Retirement is a time of life that many people look forward to, but it can also be a time of financial uncertainty. If you’re wondering how much the average UK person retires with, you’re not alone. This is a common question, and the answer can vary depending on a number of factors.
In this article, we’ll take a look at the latest figures on average retirement income in the UK, and we’ll also explore some of the factors that can affect how much you can expect to retire with.
Average Retirement Income in the UK
According to the latest figures from the Department for Work and Pensions, the average single pensioner has an income of £13,884 a year. For couples, that jumps to £29,172 between them. This is after housing costs. Around 70pc of pensioner households have an income from a private pension.
These figures are based on the latest data available, which is from the 2022/23 tax year. It’s important to note that these are just averages, and there will be a lot of variation between individual cases. Some people will have much higher retirement incomes, while others will have much lower incomes.
Factors Affecting Retirement Income
There are a number of factors that can affect how much you can expect to retire with. These include:
- Your earnings: The more you earn during your working life, the more you’ll be able to save for retirement.
- Your age: The earlier you start saving for retirement, the more time your money has to grow.
- Your investment choices: The returns you get on your investments will have a big impact on your retirement income.
- Your state pension: The amount of state pension you receive will depend on your National Insurance contributions.
- Your health: If you have good health in retirement, you’ll be less likely to incur unexpected medical expenses.
How to Increase Your Retirement Income
There are a number of things you can do to increase your retirement income. These include:
- Start saving early: The earlier you start saving, the more time your money has to grow.
- Contribute more to your pension: If you can afford to, try to contribute more to your pension each month.
- Invest wisely: Choose investments that are likely to give you a good return over the long term.
- Delay retirement: If you can, consider working for a few extra years. This will give you more time to save and will also increase the amount of state pension you receive.
The amount of money you retire with will depend on a number of factors, including your earnings, your age, your investment choices, and your state pension. However, by taking steps to save early and invest wisely, you can increase your chances of having a comfortable retirement.
Frequently Asked Questions
How much do I need to save for retirement?
The amount you need to save for retirement will depend on your desired lifestyle in retirement and your other sources of income, such as the state pension. However, a good rule of thumb is to aim to save enough to replace around 70% of your pre-retirement income.
What is the best way to save for retirement?
There are a number of different ways to save for retirement, including workplace pensions, personal pensions, and ISAs. The best option for you will depend on your individual circumstances.
What are the risks of not saving enough for retirement?
If you don’t save enough for retirement, you could end up having to rely on the state pension, which may not be enough to cover your living costs. You may also have to work longer than you planned, or you may have to make significant lifestyle changes in retirement.
What can I do if I’m behind on my retirement savings?
If you’re behind on your retirement savings, it’s important to start saving as soon as possible. Even if you can only save a small amount each month, it will make a difference in the long run. You may also want to consider working for a few extra years or downsizing your home in retirement.
Additional Resources
- The Pensions and Lifetime Savings Association (PLSA): https://www.plsa.co.uk/
- The Money Advice Service: https://www.moneyadviceservice.org.uk/en/
- The Financial Conduct Authority (FCA): https://www.fca.org.uk/
Disclaimer
The information provided in this article is for general information purposes only and should not be considered as financial advice. You should always seek professional financial advice before making any decisions about your retirement planning.
What is the average retirement income in the UK?
According to the government’s most recent data (as of 2022), pensioners make an average weekly income of £349 after deducting housing costs and direct taxes. This works out at around £18,148 per year.
Regions also influence the average retirement income in the United Kingdom.
You probably make less money in retirement than the average person if you live in London. However, you’ll probably have more money to spend on average if you’re based in Scotland or the Northeast.
Usually, the disparity is caused by a difference in housing and living expenses.
As of 2020–2022, 271 percent of pensioners got their money from private pensions.
Although the percentage from private pensions has increased recently, investments, state pension benefits, and occupational pension plans are still important sources of income for retirees in the UK.
Use our pension calculator to find out how much retirement income you might receive from your private pension and how to increase it.
Is the average retirement income different for couples?
Couples tend to have more retirement income than single people.
The average weekly income for retired couples as of 2022 is £515, which could be because their overhead is lower when they share housing than when they live alone.
An additional contributing factor could be the likelihood of divorce or separation among individuals who are single at retirement, which could have a big effect on their previous financial situation and retirement savings.
Individuals who are in committed, long-term relationships may be better able to accumulate retirement savings and more driven to do so. Get advice on pensions from a professional who is precisely matched to your needs. Getting started is easy, fast and free.