The government has recently proposed a flat rate state pension of around £140 per week for all, but could you live on it?
New research from Standard Life indicates that for most the answer is ‘no’.
The research found that almost two thirds (63%) of people believe they could not live on £140 per week. For those aged 55 and over this figure rises to 72%, just 17% of people aged 55 and over believe that they could live on £140 per week, 11% did not know.
John Lawson, Head of Pensions Policy at Standard Life said: “The introduction of a state pension of £140 a week for all is to be welcomed. This makes it clear and easy for people to understand what they will receive from the government as a pension. However, people clearly recognise that £140 a week will not likely be enough to live on in retirement.”
The survey found that younger generations were more likely to be able to live on £140 per week with older people having a greater need for a higher income, perhaps due to their level of earnings during their working lives.
The figures for the different age ranges are as follows:
|Could you live on £140 per week?||All||18 – 24 years||25 – 34 years||35 – 44 years||45 – 54 years||55+ years|
|Yes, I think I could||18%||29%||21%||18%||13%||17%|
|No, I don’t think I could||63%||46%||59%||60%||62%||72%|
Need for additional saving
The figures reveal the need for people to make additional provision during their working life for their years of retirement.
John Lawson again, “We need to get more people to save more. This means encouraging people to take ownership of their financial futures by providing access to the right level of information, financial advice and products at the appropriate times.”
The proposal of a flat rate state pension comes on the back of other government initiatives to promote retirement savings, most notably auto enrolment which will mean that by 2016 all employers will need to make pension contributions on behalf of their employees. Furthermore all employees will have to contribute to a pension, unless they take the opportunity to opt out.