One in 8 people plan to retire in 2018 with no pension, research reveals

'It is never too early to start saving into a pension and even a small amount each month can make a difference and help from a professional financial adviser can be invaluable in helping plan for retirement'

The study also shows women significantly more likely to have no retirement savings (PA)

Nearly one in eight people retiring this year have made no provision for their retirement, according to new research.

The study published by Prudential on Wednesday shows that 12 per cent of people who are about to become pensioners have no private or company pension at all. A total of 10 per cent will either be totally or somewhat reliant on the state pension while 2 per cent have some form of private savings upon which they will rely.

That means they will start retirement with an income that’s around £1,450 a year lower than the minimum income standard for a single pensioner established by the Joseph Rowntree Foundation (JRF) charity.

Prudential’s research, which appears annually, found that the numbers retiring without a pension is lower this year than the 14 per cent in 2017 and nearly half the 23 per cent recorded in 2008, but Stan Russell, retirement income expert at the financial services company, said that the figure is still “worrying”.

“While the state pension is an important part of retirement income, it shouldn’t be the only part and those still in work should if at all possible be contributing to a pension and saving towards their retirement,” he said.

“It is never too early to start saving into a pension and even a small amount each month can make a difference and help from a professional financial adviser can be invaluable in helping plan for retirement.”

The report also found that women are significantly more likely to have no retirement savings. Some 18 per cent of females entering retirement in 2018 will do so without a pension, compared to 7 per cent of males.

But Prudential highlighted that the gender gap is also narrowing over time.

Back in 2016, 22 per cent of women had no retirement savings compared with 7 per cent of men. A decade ago close to a third of women were planning to retire without a pension.

Pensioner poverty has been flagged by several charities as a major concern.

A report published by the JRF last year showed that the gap between single and couple pensioners has been widening for the last few years and that pensioners who rent their homes are much more likely to be in poverty than owner-occupiers.