Commenting on the Department for Work and Pensions ‘Framework for the analysis of future pension incomes' report, out today, Andy Zanelli, head of retirement planning, AXA Wealth, says now is the time for action.
"Today's report from the Department for Work and Pensions reveals that the pensions gap in the UK is worse than previously thought, with up to 13 million people facing a drop in living standards in retirement. The DWP report paints a stark picture for the future of retirement in Britain and highlights the need for immediate action.
"Today's figures support research from AXA Wealth2 earlier in the year that found the average shortfall in pension provision in the UK was more than 20% and people will be £4,613.96 a year worst off in retirement than they expected. Worryingly, our research found that those over 55, who have less time to make up a shortfall, are the least well-prepared, with an average pension shortfall of £7,896.72 - a massive 71% more than the national average.
"With increasing longevity and a background of low interest and annuity rates, financial planning to help secure sufficient retirement income has never been so crucial. Initiatives such as auto-enrolment and the introduction of a flat-rate state pension will be a step in the right direction. Planning ahead for retirement is vital to ensure the ambitions for later life can be met and people must consider the range of financial products and services available to them as well as efficient tax planning to maximise the income they will receive in later life. Seeking financial advice to help assess individual circumstances is an important step in taking control and preparing personal finances, both for now and the future."
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