[UK] Pensioners need over £130,000 to beat poverty

From The Telegraph

By Sarah Womack, Social Affairs Correspondent

People retiring this year were warned yesterday that they will need an average total income of at least £130,000 plus state benefits to support themselves until they die.

A study published yesterday said increased life expectancy meant pensioners' money had to last longer. The report found that those retiring over the next 15 years will need even more money as the proportion of state benefits, as part of pensioner income, declines and longevity continues to increase.

Today's 65-year-old man can expect to reach 82 while women retiring at 60 should live until at least 85. But with state benefits accounting for almost half of average pensioner incomes of £12,500 a year, they need around £6,250 from other sources such as private pensions or savings to make up the difference.

That means the average man needs a total income of £106,250 to last until 82, while the average woman needs £156,250 to survive until 85 - an average of about £130,000.

An analysis by the insurer Prudential estimates that the proportion of state benefits in pensioner incomes is set to decline to 44 per cent from 50 per cent by 2013-14, while life expectancy will rise by another three years by 2020.

Between 1970 and 2004, life expectancy for the over-65s rose by four-and-a-half years for men and three-and-a-half years for women.

That will mean more over-65s, with Britain's current population of 9.4 million rising to 12.5 million by 2020. That is expected to mean more over-65s continuing to work.

The Office for National Statistics predicts that 775,000 will be in work in 14 years, compared with just 582,000 currently.