Overestimating your retirement income

Are you relying on the state pension to fund your retirement?

Around 18 per cent of people who intend to give up work during 2010 admit they will be relying on the state pension and income from savings to fund their retirement, according to insurer Prudential.

Nearly a third of people who are about to retire either do not know how much they will receive from the state pension or overestimate how much they will receive.

But the latest figures from the Office for National Statistics show that the average expenditure for a household headed by someone aged between 65 and 74 is £321 a week.

The research found that across all people who are planning to retire this year, the state pension will account for an average of 34 per cent of their income.

Occupational pension schemes will make up 36 per cent of the average person’s retirement income, with 11 per cent coming from other savings and investments and 9 per cent contributed by personal pensions.

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