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1.5 million over-60s are still “unprepared” for retirement

An alarming number of the UK’s working over-60s population are unprepared for their retirement, according to findings from a new white paper published by Sanlam.

The statistics reveal that 1,665,000 of UK’s non-retired over-60s population don’t know how much money they have in their pension pot, whilst over a million are not aware of the pension freedoms which came into force last April. The report also suggests that fixed retirement age in the UK could be a thing of the past, with over a third of pre-retirees not envisaging being able to retire until after 70, and just under 500,000 who think they’ll be working past 75.
 
The “Which way forward?” report, released a week ahead of the Government’s spring budget, suggests that an increasing ageing population, the demise of generous final salary schemes and the pension freedoms introduced last April are all contributing to a radically shifting retirement landscape. As a result, as many as 1.5 million non-retired over-60s today feel unprepared for their future.

The report, which uses qualitative research, compares the attitudes of 1,000 people who have retired in the last five years with 1,000 over-60s approaching retirement. It suggests there are many who still feel in the dark about their retirement, with 29% saying they weren’t aware of the new pension freedoms which the government introduced in April 2015. 

The results are surprising, particularly given the new freedoms were intended to give future retirees more autonomy with their savings. Some 40% of over 60s admit that they are unaware of how much they currently have in their pension pot. 

Running concurrently with this uncertainty, future retirees also now envisage a longer working life than previous generations. Less than 2% of pre-retirees anticipate retiring before the age of 61 and around 30% expect to still be working at 70 and beyond. In stark contrast, nearly half of those that were in retirement when questioned for the report had retired before the age of 61, and almost all had retired by 67.

The report suggests that fixed-age retirement has already become an outdated concept and will no longer be possible for the majority of the current working generation. Whilst Britons have traditionally worked towards a fixed retirement date, nearly half of pre-retirees now envisage partial retirement which is phased in over a few years, with only 3 in 10 expecting to retire outright or over a short period of time. The remainder of those questioned were undecided.

The face of retirement planning is changing. Following the Government’s new pension freedoms introduced in April, people now have more choice as to how they use their pension pots. Although this gives people more flexibility to organise their finances, it also brings extra responsibility when making such important decisions. Sanlam’s report provides deeper analysis of the current retirement process and an insight into changing consumer behaviour. The contrast between decisions made by those who have recently retired and now those approaching retirement clearly shows that a seminal change is taking place.

You can read more on this, including the full research paper here

If you're approaching retirement and would like to understand more about your pension savings and options for retirement income, please speak with your Financial Adviser.
 

Date Issued: 11.03.16

Please remember any views or facts expressed above are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness. Any expressions of opinion are subject to change without notice. None of the information should be regarded as advice. Past performance is not a reliable indicator of future results. Investing involves risk and the value of investments and the income from them may fall as well as rise and is not guaranteed. Investors may not get back the original amount invested. Any tax treatment is dependent upon individual client circumstances and may be subject to change.

Sanlam is a trading name of Sanlam Wealth Planning UK Limited (Reg. in England 3879955) and English Mutual Limited (Reg. in England 6685913). English Mutual Limited is an appointed representative of Sanlam Wealth Planning UK Limited which is authorised and regulated by the Financial Conduct Authority.

Registered Office: St. Bartholomew’s House, Lewins Mead, Bristol, BS1 2NH.

Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.