The Midlands is home to six of the ten worst-performing areas in the UK for annual income from pensions, shows research by Salisbury House Wealth (SHW), the leading financial adviser.
Out of all 650 constituencies in the UK, Leicester West has the lowest average pension income of just £10,400 per annum. Other areas in the Midlands such as Coventry North East (£11,600) and West Bromwich West (£12,300) have the second and fifth lowest levels respectively.
Meanwhile, London is home to seven of the top ten areas with the highest levels of average pension income. The top three areas are:
City of London and Westminster, £34,100
Chelsea and Fulham, £31,700
Westminster North, £27,300 (see table below)
SHW explains pension income includes payments from occupational pensions, state pensions, other retirement products such as annuities, and drawdowns from pensions.
SHW says that although earnings from employment is a driver of future pension income, in terms of the amount individuals can afford to contribute to private and occupational pensions, it is not the only factor. The areas with the lowest employment income are Dwyfor Meirionnydd, which has an average pension income of £19,700, and Blackley and Broughton (£21,000).
SHW adds that although there is a significant difference between the areas with the highest and lowest pension income, the research highlights the relatively low amount of income across the UK overall.
Contributing to a private pension pot from an early age is important for ensuring a comfortable pension income in retirement. This is because gaining exposure to financial markets and reinvesting any gains enables individuals to access the benefits of long-term returns.
SHW adds that although the Government successfully brought in auto-enrolment, more could be done to help people understand the benefits of a private pension. This could be improved, for example, by teaching financial management in schools, or improving advertising and messaging about private pensions.
Tim Holmes, Managing Director of Salisbury House Wealth, says: “A decent level of income in retirement can be achieved through a few simple steps.”
“By starting early, paying in what you can, and doing so on a regular basis you can go a long way to improving your prospects of a comfortable retirement – which is what everyone wants.”
“There is a wealth of options available to help you grow you pension pot, from ISAs to SIPPs. Expert financial planning can help you make the most of the range of products out there.”
