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Future pension less than minimum wage
30/05/2008 17:44:00
Recent findings show the typical UK worker is set to retire on £215 a week, less than the current minimum wage.
An annual survey of 1,000 people is carried out by Fidelity International, the investment fund experts, producing figures known as the Fidelity Retirement Index.
According to the organisation, negative shifts in predicted retiree earnings could be largely due to the imminent replacement of the defined benefit (DB) pension.
Workers on DB pensions expect around two-thirds of their salary back, but the defined contribution pension, which it is to be replaced by, only gives 38 per cent back on retirement.
Simon Fraser, president of the Retirement Institute at the company, said: "It is a shocking thought that … we could see the emergence of a generation of private pension paupers."
Figures suggest that people could experience a drop in their earnings of 53 per cent by the time they reach retirement age.
A national governmental debate is currently underway and is expected to last six months, regarding how the country can ensure that all people over 65-years-old receive affordable, high-quality care and support.
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