Retirees' income will drop 66% after leaving work

Retirees can expect to see their income drop by two thirds when they leave the workplace. That was the conclusion of the annual 'State of Retirement' report from retirement specialist LV.Despite the Budget announcements last week that give retirees more choice about how they take their pension the report revealed they face a 66% drop.It said that while the average annual salary for the over 60s is £25,480, the average annual pension income, including state pension, is just a third of that at £8,774.This means that the average Brit retires with an annual income almost 24% less that of the minimum wage. The changes that are coming into effect will mean that the average retiree drawing their entire pension in one go will have to closely budget to ensure it lasts their lifetime.The findings indicated that the gender pay divide that women experience in the workplace continues into retirement.The research suggests that women will have to survive on an annual income that is up to 40% less than the average man's retirement income with women receiving £6,580 and men receiving £10,967 a year. {desktop}{/desktop}{mobile}{/mobile}This equates to a weekly income of £126 and £211, respectively, and an income drop of 68% for women compared to 60% for men.The findings indicate that working Brits are choosing to delay their retirement rather than put more money away. Over the last twelve months, one in ten (10%) have actually decreased the amount they are putting away for retirement by an average of £50 a month, or £600 a year on average. This equates to £535 million lost in retirement savings.Richard Rowney, LV= life and pensions managing director, said: "Brits approaching retirement today are under huge financial pressure, as their retirement savings are being stretched over a much longer period of time than before."It's clear that today's retirees leave work with far more financial commitments to contend with than previous generations meaning their money has to go further for longer."

Retirees' income will drop 66% after leaving work

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