UK Retirees face greatest income drop when stopping work

Here at PWS Dubai we are seriously concerned with the state of pensions in the United Kingdom. We work with thousands of clients helping them identify the best pension solutions to help them save and make their money grow so that they can live comfortably when its time to retire.

That being said, a recent study has revealed that UK retirees are about to face the biggest income drop when they decide to retire, when compared to pensioners in other countries, which are developed, around the world. What does this mean? It means that more reforms are necessary worldwide to deal with the aging population and the financial consequences thereof.

The Facts

An intercogovernment economic organisation, the Organisation for Economic Co-Operation and Development, has advise that pensioners in Britain will receive only twenty nine percent of the average working wage when relying on state schemes when it comes time for retirement.

The concern here at PWS Dubai is that this amount is not even half of the sixty three percent which is received by pensioners in other countries, including USA, Australia, New Zealand, Korea, Mexico and the Nordic countries, along with Latvia.

Those retiring in Turkey can expect an average of around one hundred and two percent of their working wage when they retire.

The calculations were carried out to compare pension systems from around the world, but identified that those in Britain must be given the strongest incentives to save in the long run with private pensions, rather than relying on the dwindling state pension alone. A private pension will help fill the gap, the shortfall between their lifestyle needs and the state pension, so that they can live comfortable lives in their retirement years.

Incentives to Save

The report did focus extensively on incentives being maintained to encourage workers to save into their own private pensions to ensure that they don't find themselves financially strapped in later years.

Let's admit it, retirement has been made attractive with the flexibility of the pension freedoms which have been introduced in recent years. But again, this comes with a problem when more people are tempted to draw too much of their pensions too soon.

We recommend that anyone who is looking to save into a private pension or who wants to take advantage of the pension freedoms, should seek professional financial advise before making any final decisions to do so.

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