Senior citizens in the UK who are going to retire soon should not expect to receive high pensions compared to those who have retired in the last four years.
According to a survey done by Prudential Insurance Company involving 1,003 participants who are set to retire this 2012 showed that the predicted annual retirement income has decreased by £3,100 since year 2008 to £15,500. This amount includes income that is generated from the state, company and other private pensions.
About 20 percent of the retirees in the UK have only below £10,000 to use for all expenses during the year. Those who reside in London have the highest pension incomes of them all.
According to Vince Smith-Hughes from Prudential, “The impact of the credit crunch, banking crisis, recession, and concerns over the eurozone, has been reflected in the fact that expected retirement income levels have hit a five-year-low.”
The main reason for the continued decline in the value of the annual pension is attributed to the annuity rates that have decreased by 8 percent in 2011. This is the fourth consecutive decline of annuity rates according to Moneyfacts, a financial information service provider.
According to Richard Eagling of Moneyfacts, “Unfortunately, by increasing the demand for fixed income instruments such as UK government bonds, the ongoing eurozone crisis and the Bank of England’s quantitative easing programme have driven gilt and corporate bond yields down over the last twelve months, both of which underpin annuities.”
Keep Up-To-Date
