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Pensioners face worsening health in first five years of retirement

6th August 2013 Print

For millions of Britain's retirees, the first five ‘golden years' bring life changes, which can impact their financial circumstances, or alter the most suitable way of structuring their retirement income, according to research from retirement specialist LV=.

Within the first five years of retirement, almost a third of retirees (31%) said their health had worsened, and 10% said they had been diagnosed with a serious illness. Outside of health issues, over a quarter of retirees (26%) gave financial help to family members, one in five (19%) moved house and a quarter (24%) carried out significant work to their existing property.
 
Vanessa Owen, LV= Head of Annuities said: "People often associate retirement with relaxing and taking things easy, however, it is also a time when some major step changes can happen in life. It is important that people build in some flexibility to their finances, so they have the option to adapt to their changing needs as they settle into retirement. The majority of people still currently fix themselves into an annuity for life at the point of retirement, which may limit their options in the face of life changes."
 
The changes that happened to retirees within the first five years of retirement

A grandchild was born 38%
Worsening health 31%
Needing to help family members financially 26%
Carrying out significant work to property/garden 24%
Moved house 19%
Received an inheritance 10%
Diagnosed with a serious illness 10%
Widowed/bereaved (partner) 4%
Returned to work 3%
Relocated to another country 2%

Vanessa Owen continued: "There are thousands of people coming up to retirement every week, entering the unknown and trying to transition from working to retired life, and many of these people will find themselves in a very different set of circumstances five years down the line. At that point it could be too late to change the way they can access their retirement funds.
 
"It is essential that people do their homework and don't just plump for the annuity offered to them by the company they have saved a pension with. We would always recommend that people seek specialist independent financial advice, to consider all the options available, from a lifetime annuity, enhanced annuity, fixed-term annuity, investment-linked annuity or income drawdown. There are lots of different ways to structure retirement income but many won't be aware of these options unless they seek advice."
 
For further information about LV='s range of flexible retirement solutions go to lv.com.