Thousands of UK workers will be living on an income equivalent to less than the national minimum wage when they retire, according to new research from Fidelity International.

The investment management firm found that the average employee will receive just £215 per week following retirement from all sources of income, including state pension benefits and private pensions.

This represents a drop of around 53 per cent when compared with average earnings of £457 and is less than the £220 income of someone working 40 hours per week at the current minimum wage of £5.52 per hour.

And Fidelity warns that the situation could deteriorate as defined benefit pension schemes are replaced by defined contribution schemes, further trimming retirement incomes and giving way to a generation of "private pension paupers".

Unpaid debts could put further pressure on the finances of retirees and so consolidation loans could be useful to pay off arrears before retirement.

Research from uSwitch.com released in January last year shows that the average household could save £605 over three years by consolidating their debts, money which could be added to a pension pot.ADNFCR-1287-ID-18616915-ADNFCR

Request a Callback

Fill in your details and we'll call you back