News: Study reveals average pension pot in Exeter could run out seven years too soon

Pensioners in Exeter are now likely to run out of money seven years before they reach the average life expectancy age, new research has revealed.

The ‘Age of Ruin’ report conducted by financial planning experts Money Minder, looked at the average pension pot of Brits at retirement age, and how much they need to maintain a moderate lifestyle.

The research, using Money Minder’s pension drawdown calculator, revealed a shortfall of 10.6 years - with the average single retiree needing a pension pot of at least £367,848 to maintain a moderate standard of living.

And yet, the average personal pension fund for those aged between 65 and 74 is almost half of this at £190,000, according to the ONS.

Research from the Pensions and Lifetime Savings Association revealed that a single pensioner needs £23,300 a year of income for a moderate living standard.

After the State Pension is taken into account, this leaves pensioners needing to supplement their income with £12,700 a year. The average pensioner could use this up by the time they turn 78 - despite the fact that the average life expectancy for those in Exeter over the age of 65 is 85. Nationally, there’s a shortfall of seven years with the average life expectancy at 85-years-old.

The picture differs across the UK, where life expectancy varies, and the prospect of a long and comfortable retirement remains a priority.

Ray Black, managing director of Money Minder, said: “This report highlights the sobering reality of life without adequate pension savings, and with life expectancy fluctuating across the UK, some pensioners actually run the risk of running out of money years before they hit the life expectancy age. While everyone will have access to the State Pension, you can’t rest on the blind assurance that you’ll have enough money with that to be able to maintain the same standard of living as you do while working.

“It’s important to regularly review your pensions and investments, not only so you can purchase home improvements, cars and holidays after retirement, not only for the benefit of  ourselves but also for the well-being and security of our families and loved ones.

“A pension drawdown option can let you access your pension funds while still keeping them invested - potentially with the scope to earn more over time. For people who are happy with keeping their pension fund fully invested, it has the potential to substantially grow in real money terms.”

The full Age of Ruin report is here: https://www.money-minder.com/article/how-long-will-my-pension-last.

This calculator can also help people work out their own personal Age of Ruin based on their current financial situation: https://www.money-minder.com/retirement/drawdown-calculator/