Zombie Retirements’ loom with UK’s over 50s underprepared, uninformed and daunted
In 2017 we find that there is a perilously low level of understanding and financial activity in preparing for retirement. We don’t want people to lurch, like zombies, towards their retirement.
New research from Retirement Advantage paints a troubling picture of how many people in the UK are failing to consider their impending retirements. The retirement income specialist is calling for a change of direction among a significant group of over 50s whose financial preparation is low, some of whom say they are “simply daunted” by retirement.
The firm’s survey of over 50s1 shows that 6 in 10 (61%) have not requested a state pension forecast and are therefore not informed about the level of pension they might receive, despite this being a mainstay of income for many when they retire. Only 58% say they have a will, while only 35% feel they are adequately prepared for their retirement.
Given that, for most, retirement will open up a period in life when more time and options will be available to do as they please more often, it is unfortunate that around 1 in 10 (9%) of all those interviewed said that they were “simply daunted” by the whole idea of retirement.
Andrew Tully, pensions technical director at Retirement Advantage, said: ‘In 2017 we find that there is a perilously low level of understanding and financial activity in preparing for retirement. We don’t want people to lurch, like zombies, towards their retirement. Some of this comes down to real fundamentals such as: “Do I have a will in place?” or “Just how much is my state pension income going to be worth when I retire?” These are relatively easy things to do and find out, but it shows more simple help is needed.
‘In particular, we would stress getting an accurate understanding of the pension the Government will pay you. The difference can be over £100k through a 20 year retirement2.
‘Many of those we interviewed say they will need to supplement the income they receive from the state. This is unsurprising, but unless people have the numbers then they can’t properly plan how any income from workplace pensions fits, or work out if they might need to unlock some of the value in property to get the desired standard of living. There is a real need for people to take time to sit down and consider their retirement plans. For those that are daunted or want an expert to help them, then a contacting a regulated financial adviser is a great place to start.’
- Survey conducted by Censuswide between 20.03.17 and 22.03.17 of 1,013 over 50 year olds who are yet to retire.
- Under the new state pension, people need at least 10 qualifying years on their National Insurance record. The full state pension, which comes with 35 qualifying years, is £159.55 per week. With 10 qualifying years, a person will receive 10/35th of the total, which is £46. The figures referring to the amount received over the course of 20 years multiplies the weekly sum of £46 and £159.55 respectively by 52 to account for a one year’s worth of the state pension. These figures are then multiplied by 20 to account for the amount received for the 20-year retirement.