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Cost of hobbies to soar above inflation over next decades

5th June 2014 Print

Research commissioned by pensions and retirement provider Friends Life conducted by independent analysts at Consumer Intelligence has calculated the cost of hobbies for tomorrow’s retirees when they are likely to near retirement in 2042. Analysis shows that the cost of a number of the UK’s top leisure activities including travel, golf and hiking is expected to far outstrip inflation, making it essential to plan ahead in order to be able to afford them in retirement.
 
According to the Friends Life research, the average Brit currently spends six hours a week or 312 hours a year pursuing hobbies. In retirement, two in five people expect to spend four times longer or 1,248 hours per year doing the same. Yet, without careful planning this will not be possible as according to the research the costs of our favourite hobbies will far outstrip inflation over time. Leisure travel will become significantly more expensive with, for example, the cost of a round-the-world ticket increasing to £7,778 in 2042, from £1,748 in 2014. Playing golf is expected to cost on average £1,834 per year in 2042, up from an average of £918 in 2014 whilst cooking as a hobby is set to rise by 49% and hiking by 61%.
 
The research also identified the expected retirement hobbies of tomorrow’s retirees. According to those aged 35-44, the most popular hobbies in retirement will be hiking (49 per cent), gardening (44 per cent), cooking (43 per cent), reading (42 per cent) and cycling (40 per cent)4. Interestingly, more people say they want to complete triathlons in their retirement than fishing or ballroom dancing.
 
Colin Williams, Managing Director of Corporate Benefits, Friends Life said: “As a nation we expect to spend far more time on our hobbies in retirement yet research shows this may not be affordable by the time we get there due to costs soaring far above inflation. Of course, not all of us expect round the world trips in retirement but we do all hope to be able to afford our favourite pastimes. This is why it is essential to act today and review your finances, putting plans in place to afford the future you hope for.”
 
To help consumers in planning for retirement, Friends Life has the following tips:

1 - Make sure you’re in

Under auto-enrolment, all employers in the UK need to provide a pension scheme to their eligible employees automatically. Auto-enrolment has started for lots of employers, with the rest required to follow suit by 2018. In the meantime, people in employment can speak to their employer about whether they offer a pension scheme, how they can sign up and what contributions their employer may offer.
 
2 - Consider carefully how much is affordable

Some employers will offer a pension scheme with contributions at the minimum level under auto-enrolment (up to 7-9% from 2018). This is a good start, but may not provide the level of income needed for many people when they retire. People need to consider all their options as well as what is affordable.
 
3 - Get the full picture

The government is introducing a flat-rate State Pension and getting rid of complicated ‘second pension’ and ‘pension credit’ add-ons. This will make it much easier to put State and private benefits together to get a combined potential income at retirement.
 
4 - Invest in something that’s right Most pension schemes offer access to a wide range of different investment options. The range, different levels of risk, charges and other factors can make choosing an option difficult. It may help to speak to an independent financial adviser (charges may apply), or make use of tools offered by providers that can guide people towards investments that may be suitable for their circumstances.
 
5 - Think about savings as a whole

Retirement savings can include more than contributing to a pension. For example, now that the overall ISA limit – the combined amount that you can save into a cash ISA and/or a stocks and shares ISA - is increasing to £15,000 a year (from 1 July 2014), more can be saved into this flexible solution. Individuals should investigate all the options available to them to determine which solutions suit them best.