UK - The number of people who will face hardship in retirement is soaring, new research by JPMorgan Fleming shows.
Its study - A Pension Map of Britain 2002 - shows that more than 16 million workers, or 54% of the working population, are likely to rely on state benefits when they retire – an increase of 3.45 million since last year.
JPMorgan Fleming says there has been an increase of more than six million people facing hardship – defined as an income of less than 40% of final salary – since the Pension Map study began in 1996.
JPMorgan Fleming client director Simon Crinage said: “This year marks the first time since we began the pension map of Britain that the number of working people facing hardship in retirement outnumbers those who face an okay or comfortable retirement which is extremely concerning.
“The reasons behind the increases are various: falling equity markets, falling annuity rates, the change in the tax treatment of pension funds and more erratic working patterns.”
The survey also shows that out of the remaining 13.6 million people in the working population, 4.6 million will have a reasonable income of 40-50% final salary in retirement and 8.7 million will be comfortable in retirement with an income greater than half their final salary.
In addition, regional differences are also highlighted with only 44% of people in the East Midlands facing hardship in retirement compared to 72% of people in the South West.
The JPMorgan Fleming Pension Map of Britain is compiled by Research Analysis and Knowledge Management.
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