NEW figures show the gulf between how people hope to live in retirement in Yorkshire and the reality.
But, according to the figures from financial services firm True Potential, the typical pension pot in Yorkshire will only pay out £5,300 a year.
True Potential Managing Partner David Harrison, said: “These figures show the size of the problem we face as a nation. Britain is sleepwalking towards an impoverished retirement and the reality for many in society today is that they will simply be unable ever to retire.
“That is a scary prospect and we should be in no doubt about the radical overhaul of financial education, regulation and culture that will be required to address this.”
The survey of 8,000 people nationwide found that the average retirement fund amassed by Yorkshire savers is around £107,000, a pot which would be empty in five years if future retirees took £23,000 income they say they need.
To reach the average desired retirement income, workers in Yorkshire would need to be saving a pension pot of more than £450,000.
However respected pensions expert Ros Altmann, the Government’s older workers’ champion, sounded a note of caution on the figures, pointing out that retirees may have other sources of income including the state pension.
She said pensioners have always had to alter their spending habits to match their retirement income and that older people were increasingly choosing to work for longer.
“All of this means that the fears of running out of money after just a few years are likely to be somewhat overdone,” she said,
“Nevertheless, of course people may not have saved enough for the retirement income they might ideally like and they will need to make plans to address their later life income adequacy.
“This can also include downsizing their home or borrowing against the value of their home, but ideally it would encompass a period of part time work to boost their income and improve their later life lifestyle.
“Not forcing, but enabling people to stay at work longer can have many benefits for those who are healthy and want to do so.”
Simon Gray, partner at accountancy and wealth management firm Hentons, in Leeds, said: “Most people don’t realise how big a pension pot they will need in retirement to enjoy enough income to be comfortable.
“With the power of compound interest it really is the case of the earlier the better. If a 20-year-old saves £5,000 a year and earns an eight per cent return, they’ll have a pension pot worth over £1.9m by the time they reach 65.
“However, for those who don’t have any pension provision it’s never too late to start, and with the new rules coming into play next year, accessing that pension pot when you do retire has never been so easy.”
Chancellor George Osborne recently unveiled changes to pension rules which will give people approaching retirement far more freedom over how they use their savings pot.
Help for savers is expected to feature again in the Chancellor’s annual Autumn Statement in December after years of low interest rates which have reduced the value of savings.
Older people will be a key group targeted in next year’s General Election as they are more likely to vote.