Perceptions of income requirements in retirement
The last ten years have seen a high level of public debate and policy development around the subject of pensions and the financial situation for people post-retirement. A recent report by the Pensions Policy Institute suggested that ‘many people felt they would need to have a standard of living similar to working life, in order to be satisfied with their retirement income’.
However, what was not known in any detail was how people determined what was an appropriate retirement income. In light of the paucity of knowledge around this issue, DWP commissioned the National Centre for Social Research (NatCen) to carry out a qualitative study to explore:
• individuals’ views about their current financial situation and standard of living in retirement and their feelings about their financial future;
• what factors influence individuals’ views about their current financial situation, including their perception of ‘appropriate’ retirement income and wealth;
• the influence of ‘replacement rates’ on individuals’ feelings about their financial situation. The replacement rate is a calculation of the ratio between earned income before retirement, and income in retirement;
• the factors that may have created a disjunction between aspirations for retirement and actual income and wealth in retirement.