Image via WikipediaHere is an item I read in yahoo about pensioners, I think it was published in "THE TELEGRAPH" newspaper.
Myra Butterworth, 22:23, Monday 26 April 2010
Couples need to budget nearly £600,000 to cover the cost of their retirement, new figures have disclosed.
It means each pensioner needs an income more than double the basic state pension just to cover everyday costs such as food, petrol and clothing.
The annual expenditure is a third higher than five years ago, with retiring workers hit by a double whammy of falling income from their pensions and rising costs.
Laith Khalaf, a pensions expert at wealth managers Hargreaves Lansdown, said: "Millions of people are sleepwalking into an impoverished old age. You cant expect to spend twenty or thirty years in retirement without stashing away a substantial amount of money while you are still working."
The latest figures, compiled by MGM Advantage, suggested the average household needs £564,227 to cover the cost of the first 20 years after quitting the workforce.
The calculation is based on annual household expenditure for those aged 65 to 74 at £23,107, compared with £14,926 for those aged 75 and over. Five years ago, the figures were £17,737 and £11,700 respectively.
The higher cost of living in London means an average retired couple needs a total of £668,553 over 20 years while the lower cost of living in the North East means households need £473,178.
Chris Evans, chief executive of MGM Advantage, said: "There is significant pressure on pensioner income. Those people retiring today can expect to live for twenty years but with annuity rates falling and the cost of living rising, funding retirement is a difficult task.
"With such large regional discrepancies in the cost of living in retirement, we wouldn't be surprised if more people considered relocating to other less expensive parts of the country in order to search out a better quality of life.
As expenditure has risen, pension incomes have declined as investment companies factor in the cost of the aging population and lower returns during the financial crisis.
A pension pot of £564,227 currently secures an annual income of £35,806, compared with £37,656 five years ago, according to Hargreaves Lansdown.
The basic state pension of £97.65 per week equates to £10,155 per year for a couple in retirement.
Only the very wealthy and those in the public sector with generous gold-plated schemes can guarantee a financially secure retirement, experts said.
Ros Altmann, a pensions expert and governor at the London School of Economics, said: "We have a real pension crisis and politicians have not woken up to it. Most peoples pensions are not going to deliver the figures they would have expected when they first started saving unless of course, you happen to work in the public sector."
Separate research by equity release specialists Key Retirement Solutions suggested pensioners are entering retirement with average debts of £36,000, including credit cards, loans, mortgages, and overdrafts.
With more immediate financial concerns such as avoiding having their homes repossessed and covering the cost of rising petrol bills, charities said households were failing to save enough for their retirement.
Michelle Mitchell, charity director at Age UK, said: "This report is another powerful reminder of the need for adequate pension provisions. Its not surprising many people are shocked by the drop in income and standards of living they experience at retirement."
Gordon Brown still has no conscience about his plundering of the pension funds which added to pensioners problems.
We did our bit to keep the pensioners that were around when we were working, with the pledge that we would be looked after in our retirement but quite the opposite has occurred.
We are among the poorest pensioners in Europe, with our savings for retirement in private, or work pensions, taxed three times before it reaches us, and a state pension that is impossible to live on thanks to Margaret Thatcher doing away with the earnings related pension, and Labour plundering our pension schemes.
Why in the world should we vote for any of them?