Many of today’s workers are often left to their own devices to save for life after work
It’s no secret that the traditional approach to retirement planning is becoming increasingly obsolete. While previous generations may have depended on their employers to provide them with a comfortable retirement, many of today’s workers are often left to their own devices to save for their retirement.
However, even as individuals take on more responsibility for their financial futures, they face a number of challenges that can make this task all the more daunting. With the UK’s demographic landscape evolving rapidly, factors like increased longevity and delayed marriage are making it harder than ever for people to accumulate the savings they need to retire comfortably.
Whether you’re just starting out in your career or nearing retirement age, it’s never too early or too late to start planning and saving for the future. By taking a proactive approach to retirement planning and seeking out expert professional advice where necessary, you can position yourself for success and enjoy the retirement you deserve.
Research into the attitudes of the over-50s towards their pension has uncovered that half (49%) regret not saving into their pension sooner, and almost two-thirds (64%) wish they had contributed more into their retirement savings at an earlier stage.
A quarter (26%) stated that they only started paying into their pension after they turned 30 years old, primarily because they did not feel financially stable enough to contribute any sooner (51%). Many, understandably, prioritised raising children (42%) and paying off their mortgages (40%) before putting any surplus cash into their pension. However, a third put leisure/holidays (32%), clothing (21%) and their pets (10%) before their retirement income.
Almost four in ten (39%) people over the age of 50 believe that an income of between £10,000 – £20,000 per annum in retirement will be enough to live ‘comfortably’. This is despite figures announced stating that £20,800 per annum will only provide an individual with a ‘moderate’ standard of living in retirement. To enjoy a ‘comfortable’ standard of living, the amount would need to increase to £33,600 per year.
A quarter (24%) of those aged over 50 believe that a personal contribution of between 0% to 5% of their salary is an ‘appropriate and achievable’ level to attain a savings pot big enough to support them in retirement.
When asked about financial advice, worryingly more than 70% of over-50s say they have never sought professional financial advice regarding their pension. Almost a third (30%) say they feel they know what they are doing and don’t need financial support, while 10% say they rely on their family and friends for support and advice. However, after hearing that they could add as much as £47,000 to their pension (over a decade) by taking professional financial advice, half of them say they would.
Pensions are more important to more of us than ever before. Automatic enrolment has brought pension savings to millions, but this was only introduced in 2012 and for many, especially those over the age of 50, it is perhaps too little, too late.
Hindsight is a wonderful thing and life in your 20s and 30s can often take over, with children to raise, debts to pay and holidays to be had. However, it’s important to take stock of your financial situation early. You may not think you have enough spare cash, or that you have years until you retire, but most people over the age of fifty (64%) wished that they had paid more into their pension pot, sooner.
It’s also important that people are realistic about how much they might need to live on in retirement. With more people continuing to pay rent or mortgages after they finish working, it is unlikely that an income of between £10,000 – £20,000 per year will be sufficient to have a ‘comfortable’ lifestyle.
1,034 UK adults over the age of 50 (retired and non-retired) interviewed between 31.01.2022 – 07.02.2022