Personal Pension  

Average income from personal pensions falls to £939

Average income from personal pensions falls to £939
 

The average income received from personal pensions fell to just £939 per year in 2021/22, according to Bowmore Financial Planning. 

The Office for National Statistics data, based on the year ending March 2022, revealed that this is a 14.3 per cent fall from £1,092 received in 2020/21.

The firm said the data is particularly concerning as pensioners are already finding their finances stretched to the limits amid the cost-of-living crisis, with many retirees having to return to work in 2022. 

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Last year, the number of over 65s in employment more than doubled from 5.3 per cent to 11.9 per cent, according to ONS data from May 2022.

Bowmore Financial Planning said workers should ensure that they contribute regularly to their personal pension schemes to avoid financial struggles in retirement. 

Otherwise, many pensioners could have a retirement fraught with financial concerns and may have to work longer than they had originally planned.

Gill Millen, managing director at Bowmore Financial Planning, said: “The latest pensions data is hugely concerning and emphasises the importance of workers making pension contributions regularly and early into their careers. 

“Failure to do so could be very damaging to a person’s retirement.”

Meanwhile, the data found that income from workplace pensions also fell last year to £10,140 per annum. 

This is a drop from £10,244 in 2020/21. 

As a result, the total income received from personal and workplace pensions last year amounted to £11,079.

This figure is less than half the UK national living wage, which currently totals £22,672 per year.

Millen added: “Thousands of pensioners have been forced back into work over the past year, precisely because they have not got the financial capabilities to retire. 

“These problems could be avoided if workers plan for their retirement as early as they possibly can.”

sonia.rach@ft.com

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