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Women leading the way in pension saving increase

28 September 2017

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The number of people retiring without a pension has fallen significantly over the last 10 years – and women have led the way, according to new research from Prudential.

Prudential's 'Class of?' research, has tracked retirement finances, plans, and aspirations of people retiring each year since 2008.

Data from the research showed one in four (23%) of those retiring in 2008 had no pension savings at all, but this has dropped to one in seven (14%) of those planning to retire in 2017.

Prudential said the data reflects the success of government and employer initiatives, such as auto-enrolment, to encourage savings.

Women have led the way in reversing the pension saving trend – in 2008 32% of women stopped work with no private pension savings, compared with 19% in 2017.

Just over one in six men retired without a pension in 2008 (17%) while just nine per cent will do so this year.

Prudential said the growth in pension saving rates has taken place against a backdrop of 'massive upheaval' in UK pension saving rules and worldwide financial volatility and political upheaval.

In the face of these challenges retirement incomes for new retirees have struggled to recover from the sharp fall they took immediately after the financial crisis of 2007 to 2008.

The Class of 2008 expected to live on £18,700 a year – a figure that fell to £17,800 in 2009 and continued to fall until it bottomed out in 2013 at £15,300.

Since then a slow recovery has taken place, but even now, retirees in 2017 expect to live on £18,100 a year – still £600 a year short of those who gave up work 10 years ago.

Vince Smith-Hughes, retirement income expert at Prudential, said: "The past 10 years have been a decade of constant change with pension freedoms, the new State Pension, the roll out of automatic enrolment and the abolition of the default retirement age, to name just a few."

"The financial crisis, the subsequent recession and ongoing political change have all added to the uncertainty, however, despite all of this, the message about the importance of retirement saving seems to be getting through, demonstrated by a significant increase in the numbers reaching retirement having saved for their future."

First published 28.09.2017

Lindsay.sharman@wilmingtonplc.com