Recession woes grow for pensioners

The UK's deepening economic crisis will mean the 3.25 million UK adults who plan to retire in 2009 expect to receive £2.87 billion less in their pensions than those who planned to retire in 2008, according to the Prudential Class of 2009 retirement survey.

The survey finds that UK workers planning to draw their pensions in 2009 expect to get an average income of £17,779 a year, some £884 less than those retiring in 2008 who anticipated drawing an average annual income of £18,663.

Retirement will mean taking a £7,129 cut in income compared with the national average salary of £24,908 but some believe they will be considerably worse off.

The Prudential survey shows that 11 per cent of people retiring in 2009 expect to receive an income of less than £10,000 a year from their pensions and investments, with 12 per cent of women expecting to manage on this level of income compared to 9 per cent of men.

Insufficient pension and savings

Many people planning to retire in 2009 are sceptical that their pensions and any savings would provide them with sufficient income to enjoy a comfortable life in retirement.

While just over a third (39 per cent) said their pension and savings would give them a decent retirement income, nearly two-thirds (61 per cent) were doubtful that they would have enough money to enjoy a comfortable life in retirement.

And when asked if they thought they were financially well prepared for retirement, fewer than half (47 per cent) responded positively.

Boosting retirement incomes

Keith Haggart, Director of Lifetime Mortgages at Prudential said: "The global economic recession is relentless and indiscriminate in its impact and it was only a matter of time before we began to see British pensioners bear the brunt.

"Although the results of our survey make unsettling reading, there are ways for pensioners to maximise their incomes during these difficult times. Drawing on some or all of the assets saved throughout their working lives, including releasing value from property through equity release schemes, can boost annual incomes without having a detrimental impact on quality of life or forcing pensioners to downsize or embark on a fire sale of their possessions and assets.

"Rather than struggle through what should be some of the best years of their lives, anyone approaching retirement or who has recently retired should talk to a financial adviser who can help them review all their assets and savings to see how they could be used to maximise income."