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Prudential Research Finds Many 2011 Retirees Unable to Leave Inheritance

According to new research from Prudential, only half of those retiring this year will be able to afford to leave an inheritance. Just 52% of those questioned are confident they have enough income and assets to fund their retirement and still be able to leave money to relatives and dependents.

Prudential’s Class of 2011 research questioned people planning to retire this year and found that 26% have already ruled out being able to leave any inheritance while another 22% were unsure whether their personal savings would be sufficient to fund their retirement. The results also show that 9% of those planning to retire this year will cancel their inheritance planning in order to boost their own retirement income.

Gerry Brown, a tax and trusts expert from Prudential said: “Obviously the focus for retired people has to be on their own retirement income and so leaving a financial legacy can become a secondary consideration. Our research shows that inheritances are increasingly in the ‘nice to do’ rather than the ‘need to do’ box because of uncertainty around being able to afford a comfortable retirement.

“For those who do hope to leave a financial legacy there is a risk of assets that increase in value being left exposed to tax as the threshold for inheritance tax is frozen until 2015.

“It is therefore imperative for people looking to leave an inheritance and secure a comfortable retirement income to seek professional financial advice in the run up to retirement and to save as much as possible, as early as possible.”

Men are more confident of leaving a financial legacy – the research results show that 56% of male retirees plan to leave an inheritance compared with 48% of women.

The Class of 2011 research has previously found that this year’s average expected retirement income is£16,600 with just 39% confident they have saved enough for a comfortable retirement.

Across the UK those planning to retire in Scotland this year are the most positive about their ability to leave an inheritance – 67% of them believe they will be able to leave a financial legacy for their families, compared with only 43% of retirees in Wales.

The information contained in Prudential UK’s press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk.

Via EPR Network
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Prudential Reports Over A Third Of Women Face Retirement Poverty

Prudential has revealed new research that shows more than a third of women (35 per cent) planning to retire in 2010 will receive an income which is below the poverty line* – £14,000 a year or less – according to the latest findings** from Prudential’s Class of 2010 retirement survey.

Prudential Reports Over A Third Of Women Face Retirement Poverty

By comparison 29 per cent of men will face their retirement on an income of less than £14,000 a year.

The gender gap becomes even starker over the age of 65 where 42 per cent of women over 65 will have incomes below the poverty line compared with 33 per cent of men. According to the Joseph Rowntree Foundation, a single person in Britain needs to earn at least £13,900 a year before tax** in order to afford a basic, but acceptable standard of living.

Overall nearly a third (32 per cent) of people planning to retire in 2010 will have an income that falls below the poverty line.

Via EPR Network
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Prudential Reveals Imminent Retirees Willing To Work Longer To Secure Higher Pension

According to the latest research* from Prudential’s Class of 2010 retirement survey, 57% of people planning to retire this year would be willing to work on in order to guarantee a higher income when they do retire.

Prudential Reveals Imminent Retirees Willing To Work Longer To Secure Higher Pension

In fact the new study of attitudes to retirement showed that 25% would be happy to work for five years more, with 7% of these people willing to put in another 10 years before retiring.

The research highlights changing attitudes to retirement as people come to terms with increased longevity – as well as the financial effects of the credit crunch and recession on retirement saving plans. The average 65 year-old man is expected to live to 83 and a 65 year-old women is expected to reach 85**.

Prudential found that 18% of those who are planning to retire this year believe they have saved enough to ensure a comfortable retirement and rule out working on even if it could guarantee them a greater income in retirement.

Another 21% refuse to continue working past statutory retirement ages even if that means they will struggle financially.

The research shows it is the over-65s who are the most willing to keep working, with more than three-fifths (62%) saying they would stay in employment to boost their retirement savings.

Vince Smith-Hughes, head of retirement income at Prudential, said: “Working beyond the normal retirement age is already a reality for many people who either have insufficient savings or simply want a greater income when they do come to retire.

“But for a lot of people planning to retire in the very near future the state retirement age is sacred and their expectation has always been to retire at 65. Once they reach that milestone, regardless of the amount of money they have, they simply do not want to work anymore. This is a potential issue because the average 65 year-old is likely to live for another 20 more years, and that’s a long time if you’ve only got limited retirement funds.

“I think what our research confirms is how important it is to consider retirement many years before you actually reach it, and make sure you get financial advice to help you plan for retirement.”

Prudential analysis shows that working an extra five years from age 65 and paying£100 a month into a pension of £100,000 could boost a retirement savings by an additional £53,000. Paying in £200 a month over five years could yield an extra£62,000.

The 25% tax relief on pensions contributions means that a monthly deposit of £100 grosses up to £125. The figures assume a 65-year-old male with a selected retirement age of 70, paying additional regular monthly contributions into an existing pension funds of £100,000***.

Via EPR Network
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