13th June 2014
Dwindling pensions and longer retirements mean that almost two-thirds of Britons are worried about a lack of money in old age.
Research from AXA Wealth shows 63% of UK adults are worried about not having enough cash. Over a third, 38%, are nervous they will not have enough money to achieve their retirement ambitions and 29% are worried they will be in the even more precarious position of not being able to afford essentials like food and heating.
One of the biggest concerns is that individuals have a lack of understanding about how much they will need to live on. One-in-three people said they do not know how much money they will need to live on in retirement, a lack of knowledge that could fuel anxiety in later life.
Nick Elphick, managing director of specialist products at AXA Wealth, too many people are unaware and fearful of what may happen to them in retirement.
‘Retirement should be a time of optimism and enjoyment, yet we are seeing that most people are unprepared and fearful of what may happen to them,’ he said.
Of those in their 50s – a prime decade for preparing for retirement – just 7% at this age had no financial worries about their retirement.
Elphick said those approaching retirement needed to look not just at their pension wealth but all their savings and investments to work out just what sort of retirement they can afford.
He recommended consolidating ‘wealth from a variety of assets’ to make the most of all tax allowances. This would go some way to allaying the fears of a quarter of people that they would become financial dependent on other family members in retirement.
Known as the ‘golden boomerang’ generation, these babyboomers have returned to their children for financial support.
‘Ultimately, none of us want to be dependent on others in retirement, but to achieve this people need to be supported in putting in place realistic and achievable steps to build the retirement pot they need,’ he said.
Considering the fears about lack of pension savings it is no surprise an increased number of people are working beyond the traditional retirement age of 65.
This week the Office of National Statistics said there are now 96,000 more people working past the age of 65 than there were a year ago.
‘It took more than 10 years for the number of people working past the age of 65 to double from 500,000 to a million, at the current rate it will only take six more years for that figure to reach two million,’ said Steve Lowe, director at Just Retirement.
‘One in every 10 people aged 65 or over is working, some by choice but many because of financial necessity. The combination of longer retirement and inadequate pensions is forcing many to continue working past state pension age.’
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