Retirement income 'has plummeted 72% in last 15 years'
Anyone purchasing an annuity today will receive little more than a quarter of the income than someone who did so 15 years ago, new research has found.
It highlights the desperate situation facing many older workers, who may have to delay their retirement plans to avoid ending up in poverty, according to Moneyfacts.
The finance site found that who paid £100 per month into an average personal pension fund for 20 years and then purchased an annuity today would receive an annual income of just £2,109, or £175 a month.
This is down almost 8% compared to a year ago and a whopping 72.7% on 2000, when the same amount of money would have secured an annual income of £7,748, or £645 a month.
Investment Life & Pensions Moneyfacts editor Richard Eagling said many people now had unrealistic expectations about retirement income
"Private pension provision is still being neglected, meaning that there is a real danger that tomorrow's pensioners will end up in poverty," he said.
"Dreams of a comfortable retirement could easily be shattered unless individuals can either make up the pension shortfall through greater contributions or accept that they may have to delay their retirement.
"It is vital to increase awareness not only of pension options, but also the potential retirement income outcomes as too many people have outdated and unrealistic expectations as to what they will eventually receive."
Belfast Telegraph Digital