Retirement Income Gap Revealed

Over-45s in Fife are facing an annual retirement income gap of more than £10, 000, that's according to new figures.

A report published today warns that many will be forced to rely heavily on the state pension which will still fail to bridge the gap.

29% of people who took part in a survey admit they're not confident their finances are fit to retire, while 35% of over-45s do not know or have not even thought about how much retirement income they will need.

Figures show Scots have an expected annual retirement income of £13,930 from savings and investments.

The Aviva study also reveals:

• Over-45s in Scotland have a typical (median) current savings and investments pot of £52,156. This is £1,637 (3%) less than the typical over-45 in the UK who has £53,793. 
• Despite their smaller pots, Scots have an expected annual income of £13,930 from savings and investments once they have retired, which is 11% higher than the annual income typically expected by over-45s across the UK (£12,590).
• With an average state pension of £6,656 per year, the typical person in Scotland still stands to have a shortfall of £3,750 even with their state pension.
• Even those Scots who will receive the maximum of approximately £7,800 when the new flat rate state pension is introduced in April 2016 will still be left with a £2,606 shortfall.
• The five most popular savings and investment products held by over-45s in Scotland are current accounts, which 80% hold, followed by savings accounts (62%), cash or stocks and shares ISAs (38%), company pensions (37%) and personal pensions or Self Invested Personal Pensions (SIPPs) (21%).
• Over-45s in Scotland are less likely to have any of these savings and investments compared to the UK average. For example, 21% of over-45s in Scotland have a personal pension/SIPP whereas 30% of over-45s across the UK have one.
• Company pensions make the largest contribution to the typical retirement savings pound (£) among over-45s in Scotland, typically providing 24p of each £1 saved. Buy-to-let property makes up a further 21p and personal pensions an additional 20p of the typical £1. In comparison, savings accounts only contribute 6p while current accounts provide an even smaller contribution of 2p.