Poverty in retirement top concern for Brits
Almost two thirds (63 per cent) of Brits are worried about having a lack of money in retirement, new research from AXA Wealth has found.
The research, conducted by YouGov, which looks at attitudes toward and preparations for retirement among UK adults, identified the top concerns:
38 per cent are nervous of a shortage of funds to achieve retirement ambitions
29 per cent are really worried about not having enough money to cover essentials such as food and heating
25 per cent are worried about becoming financially reliant on others.
Demonstrating their absence of preparation, three in 10 (30 per cent) respondents admitted to not knowing how much money they will need to live on in retirement, which could fuel the anxiety felt when approaching this stage of life.
Nick Elphick, managing director of Specialist Products, AXA Wealth, said: “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. At the start of this year we warned that we were approaching the age of the ‘golden boomerang’ generation as babyboomers returned to their children for financial support. Financial advice is key if we are to avoid this becoming a reality.”
To mitigate their concerns, consumers may wish to:
consolidate wealth from across a variety of assets as they approach retirement to ensure they are making the most of all available tax allowances
pool assets with a partner in a family SIPP to take advantage of the ever changing tax landscape.
With the youngest babyboomers turning 50 in 2014, it is particularly worrying that only seven per cent of adults in their 50s have no financial worries about their retirement. Concerns about returns on savings (23 per cent) and the stability of investments (11 per cent) present an opportunity for the adviser community to step in and help consumers in their 50s to build a strategy that will allay these fears.
Elphick concluded: “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. With greater flexibility around retirement options expected next year, advisers have a role to play in helping to manage peoples’ finances so they have the level of income they want. We have witnessed an entire generation sleepwalking into financial difficulties in later years and quite simply we, as an industry, cannot let this continue.”
The AXA Wealth pensions’ proposition was ready to meet the increased flexibility requirements introduced from March this year following the Budget and will enhance its proposition depending on the outcome of the Pensions Bill consultation to continue offering the best possible options for advisers and their clients.