Around one out of seven people in the UK expecting to retire this year have no personal pension savings provision made, a survey has found. According to the study released by Prudential, several expectant pensioners will be left dependent on the state pension for their support.
Women are three times worse than men with no pension savings, with nearly one in four women relying on the state compared with 7% of men. State pension is estimated to provide for more than a third of their income, which indicates that women will receive 41% of their retirement income from the state compared with 31% for men.
With 19% of them having no other savings, the soon-to-be pensioners from Wales are likely to be the most dependent on state pensions. They are closely followed by 18% of them from Eastern England and East Midlands. However, Londoners fare better as they are least likely to rely on the state with just 8% taking up retirement without any pension savings.
"Someone expecting to live in any degree of comfort needs to have made some sort of pension provision of their own," Prudential's retirement income expert Vince Smith-Hughes said.
A new state pension was introduced on 6 April 2016, which is set at a single-tier rate. The previous system allowed people to receive at least some state pension even if they had made only a few years of National Insurance (NI) contributions.
However, now, people will need at least 10 years of qualifying National Insurance contribution to get any state pension — and 35 years of contributions to get the full amount. This will lead to around 70,000 people in their 50s and 60s missing out entirely on the new state pension between now and 2030, according to an analysis by charity Age UK.
A new pensioner will now be getting £155.65 a week (approximately £8,100 a year), which is said to be significantly lesser than what the Joseph Rowntree Foundation has recommended as a minimum standard of income at £182.98 a week.
A department of Work and Pensions spokesman said: "The new state pension is particularly beneficial to women who have taken time away from work, with many receiving a higher weekly income than they would have under the previous system."