What is the average pension in the UK

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What is the average pension in the UK
Retirement age is due to rise to 66 in 2020. (Keith Brofsky/Photodisc/Getty Images)

Reports have found that, in 2013, over half of UK workers are failing to save adequately for retirement, even though financial hardship in retirement is one of the greatest fears among Britons. Workers save over their careers to accumulate a pension pot from which an annual income - - via an annuity - - is paid once they stop working. Average pensions in the UK are declining.

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Basic state

The basic state pension is paid to individuals of retirement age who have made sufficient National Insurance contributions throughout their working lives. Your entitlement increases with each year of contributions made. To get the maximum state pension you need 30 years of NI contributions. In 2013, the basic state pension is £110.15 per week. Individuals receive a state pension regardless of other pensions they may have through a company or private investment. The basic state pension in the UK lags behind those of many other countries, such as Australia, France and the USA, but, unlike those countries, it is not linked to an individual's earnings.

Other types

Besides the state pension, workers may have provision for retirement through one or more schemes. Pensions are provided through companies (although much less common than previously), either based on your final salary, the average salary over the years you worked for the company or based on contributions. Individuals may also take out a private pension offered by a financial institution. This can mean an investment vehicle managed by the firm, or one in which the individual decides how the money is invested.


When contributions into all pension types are taken into consideration, as of 2013 the average pension a UK citizen would receive is approximately £13,000. Omitting the state pension, the average pension pot among savers is £150,000. This provides an annual income of just £5700.


There are differences in pensions between the public and private sectors of the workforce. In 2012 the BBC reported that the average pension being paid to a retiree from the public sector was £5600, while for their counterparts from the private sector, the annual pension was £5860. However, far more workers in the public sector were saving into a salary-linked pension -- 87 percent -- than in the private -- 12 percent. This is primarily due to the reduction in pension provision by private firms.

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