Using published Government data, Standard Life has calculated the real retirement age of many people in the UK who currently have no retirement savings as anywhere between 74 and 86.
Following the Government's decision to increase state pension age as high as age 68 in the future, many people who have no retirement savings and are hoping to rely on state benefits will find their income in retirement fall as low as 21% of their pre-retirement earnings.
Take a man currently aged 27, classified as earning an average salary of £25,800 per annum. His state pension age will be 68. If this person retires at 68 and has no additional retirement savings, they will retire on 34% of their pre-retirement income, or £170 per week in state benefits. If this man chose to defer retirement until age 79, he would receive 66%, or two-thirds of pre-retirement income, through annual increases to state benefits because they have been deferred.
Health insurance: News update: 20/09/2009