Heartwood reveals the cost of a comfortable retirement
According to Heartwood, the independently-owned wealth manager, newly retired 65 year olds in the UK’s wealthiest 10% of households will need to spend £920,000 to maintain their standard of living over a 20 year retirement, over twice the amount that would be spent by the average household.
Heartwood’s analysis reveals that over the next 20 years, today’s wealthier pensioners will spend over £146,000 on recreation and culture (16% of total expenditure), £130,000 on housing and energy and £136,000 on food and drink. Approximately £89,000 (10%) will be spent on transport while restaurants and hotels are set to account for £60,000 of their retirement pot (see note to editors for full breakdown).
However, given falling retirement incomes and the rising cost of living Heartwood believes that even better off pensioners may have to reign in their spending and will be forced to adjust their lifestyle aspirations.
Tony Slocombe, Divisional Director at Heartwood said: “Today’s 65 year old baby boomers are expected to live at least another 20 years and for the wealthier amongst them this will mean footing a bill of around £920,000. Those who are falling short of this figure will have little option but to continue working for longer. They may also want to generate higher returns from retirement and investment funds but this can mean embracing greater investment risk.
“After working hard all their lives it’s not surprising that wealthier pensioners want to enjoy themselves but for many it will be increasingly difficult to continue allocating so much of their outgoings to recreational activities. Conditions are conspiring to make it harder for people to build up a sufficiently large retirement pot so it’s more important than ever to start planning as early as possible and being realistic as to what you can expect to afford.”
Heartwood provides a range of investment, tax and retirement planning services for high net worth and ultra high net worth individuals. For further information on Heartwood, visit heartwoodwealth.com.