Millions of British workers could be heading towards retirement poverty, with new research warning that many may struggle to afford even the basics. A study by Scottish Widows and Frontier Economics found that 15.3 million people across the nation are set to fall below minimum retirement standards.
The worst-affected areas are Northern Ireland and North East England, where 48% of residents might fail to meet the £13,400 a year required for a basic single-person retirement, as outlined by the Pension and Lifetime Savings Association. The South West is not far behind with 46%, while in Wales and the West Midlands, 44% and 42% of people, respectively, could also face difficulties. In London and the North West, approximately 41% of residents are at risk of falling short in retirement, compared to 39% in Scotland.
The East Midlands has 36%, while Yorkshire and the Humber and the South East have 34%. The East of England fares best, but nearly a third of people (32%) risk not meeting even basic retirement standards.
To cover just the basics, a single person needs around £13,400 a year, while couples outside London need about £21,600. This only includes essentials like food, bills and housing, not extras such as holidays or leisure.
By contrast, the full state pension currently pays £11,973 a year, leaving a gap of around £1,400 for individuals aiming for even the most basic standard.
For a more comfortable lifestyle, it’s £31,700 a year for single retirees and £43,900 for couples, and £43,900 and £60,600 respectively for a fully comfortable retirement.
The problem is many people don’t have enough workplace or private pensions to makeup these gaps, and some don’t even qualify for the full state pension.
Scottish Widows retirement expert Susan Hope said: “The differences between people’s pension prospects across the UK are stark and highlight the scale of the challenge to crack the pensions crisis.
“Across towns, cities and rural communities, people are facing very different futures. The postcode divide needs to be urgently addressed.
“The everyday pressures on people’s money doesn’t make this an easy task, so we need to help them to feel empowered to make decisions about their future.”
