Retiree travel dreams could lack funding

Grannies and granddads dreaming about travelling in their golden age of retirement may find their funds sorely lacking when it comes to crunch time, according to new research from the fifth annual Scottish Widows UK Pensions Report.

Scottish Widows has found the over 50s are one of the groups hardest hit by the credit crunch in terms of saving for retirement, despite pensions savings increasing overall since last year. People over fifty are most likely to have cut their savings in the last 12 months (21%), meaning that expensive retirement dreams such as trekking across Tibet or walking the Great Wall of China may be just a pipe dream once they reach retirement. And of those retirees who received a lump sum on retiring, just one in five (19%) used it to treat themselves.

The research shows that many pre-retirees plan on travelling in their retirement, with half of those surveyed dreaming of globetrotting in the future (50%.) However, well over a third (34%) of retirees have found that their retirement income is less than they expected. Furthermore, 36% of retirees don't believe that they prepared their finances adequately for retirement, which suggests they may have found they have insufficient funds to participate in expensive activities such as travelling. If more people were prepared to put aside the recommended 12% of their income into a pension, they might find their retirement dreams could more often be turned into a reality.

Ian Naismith, Head of Pensions Market Development at Scottish Widows comments: "We know that saving for retirement is difficult, particularly in the current climate, but for anyone planning on enjoying their golden years and taking on new challenges, preparation really is everything. It is vital that people start saving for the future early on, or they will be forced to cut back their plans. Our research showed that just 54% of the nation are only saving adequately for their retirement, so many people will find that they may not be able to fulfill their retirement ambitions once they have finished working."

The number of globetrotting grannies and granddads may be in decline as credit-crunched retirees increasingly spend their income on activities closer to home. Of the pre-retirees surveyed, over a quarter (26%) said they plan on making renovations and doing DIY in their homes, and a third (35%) that they plan on spending more time with their children and grandchildren. Many pre-retirees also want to keep their minds and bodies active without spending a great deal of cash - 22% said they plan to do more charity or voluntary work in their retirement, and 42% that said they would like to exercise more. 42% of green-fingered grandparents also want to take advantage of their newly free time by pottering around the garden.

Ian Naismith, Head of Pensions Market Development, at Scottish Widows commented further: "It's evident that retirees are spending more time at home and with their families in the wake of the credit crunch. They are participating in more pocket-friendly activities such as gardening, golf and spending time with their grandchildren in retirement, despite their earlier dreams of travelling in their golden years. The fact that 71% of retirees surveyed don't believe there is sufficient emphasis on people saving for their retirement shows that many may not putting aside enough in order to enjoy more extravagant activities in retirement. For aspiring globetrotters, the message is that you need to save early and save consistently - Scottish Widows recommends putting aside 12% of income from age 30 to ensure a reasonably comfortable retirement, and more if you want a more luxurious lifestyle."