Two in five pension savers aged 45-plus have not planned for financial shocks in retirement

21st September 2015


More than two-fifths, at 42%, of pension savers aged 45 and over have made no plans to cushion the blows of future shocks to their retirement plans, new research from MetLife shows.

Its study of the hopes and fears of the UK’s 15.8m over-45s – whom MetLife have labeled the “Exposed Generation”, shows 85% are worried about the increased risks to retirement dreams now that pension freedoms are available.

Nearly a third, at 31%, fear the impact of making mistakes with retirement savings but the biggest concern for 45% of over-45s is being able to afford long-term care if they or their partner suffer ill-health in retirement.

The insurer’s analysis shows a gender split, where 49% of women say they have not planned for potential future shocks compared to 36% of men. In addition, just 27% of men are worried about making mistakes with retirement savings compared with 35% of women.

MetLife conducted the study as it believes the over-45s have the most to gain – and potentially lose – from pension freedoms and has launched its new Retirement Portfolio  flexible guaranteed drawdown plan which is the first to provide daily lock-ins and enables savers to start, stop and restart their income in retirement to suit their personal needs.

The research showed the Exposed Generation expect to have on average retirement savings of £125,570 by the time they stop work and hope to have an average retirement income of £21,700. But more than 2.5m or 16% of over-45s have no private pension savings.

Dominic Grinstead, managing director, MetLife UK believes there is a real risk that the rush to take advantage of pension freedoms could leave savers facing real hardship in retirement if they are not prepared for financial and life shocks.

He said: “Future shocks range from the financial such as a stock market crash hitting savings to a surge in inflation hitting income to the general risks of life such as house repairs, paying for long-term care or having to bail out adult children.

“Retirement income plans have to be flexible enough to accommodate these financial and life issues while also providing certainty and good value.”

The table below shows the future shocks the over-45s expect to face in retirement and the difference in views between men and women. Around one in 20 expect they might end up divorced

Unanticipated health or care costs 37% 31% 43%
Unanticipated home repair costs of more than £10,000 35% 30% 41%
Inflation above 4% 33% 35% 31%
At least one stock market crash 32% 37% 25%
Bailing out children 30% 29% 30%
Adapting home for old age 27% 23% 32%
House prices dropping by 5% 17% 15% 19%
Health care costs for parents 16% 16% 17%
A tax bill £5,000 higher than expected 8% 8% 9%
Divorce 5% 6% 5%
NONE OF THE ABOVE 16% 15% 17%


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