12th May 2014
The majority of professionals have no idea how much income they will have when they stop working while more than a quarter will need to work past their retirement age says new research.
The study from financial services provider Wesleyan reveals that most professionals, including doctors, lawyers, dentists and teachers are worried that they will not be able to adequately fund their retirement. The survey showed that more than two thirds, at 67%, did not know how much income their pension arrangements would generate and 61% were worried they would not have enough to live comfortably in retirement.
The average respondent thought they would need £39,350 a year to live on in retirement, compared to the average pension income of £14,376. Only 27% were relying just on a pension for retirement income, and more than half of those questioned have plans to use their property for additional support.
Only 27% said they were planning to retire early, down from 34% in 2011 and more than a quarter, at 26%, felt they would have to work past their retirement age.
Some 46% reviewed their retirement planning less than once a year and of those more than half, either could not remember the last time they reviewed their plans, or had not done so since joining their pension scheme.
Samantha Porter, Wesleyan’s group sales and marketing director, says: “People often have a blind spot when it comes to planning for their retirement income. They also often over estimate how much they will need once they stop working.
“The key thing is to have a goal and then work out how to achieve it. Pension planning should be part of a regular financial review as changes such as the fall in pension tax allowances and the initiatives announced in the Budget recently could all have an impact. We would recommend that everyone gets into the habit of reviewing their finances at least once a year.”