SIPP Investors more confident about their retirement plans

Over a third (34%) of investors want to retire early, yet 69% are cautious or concerned about their retirement plans, despite having already started saving according to a poll by J.P. Morgan Asset Management.

In the poll of 657 investors, one in five said they hold a tax efficient SIPP (17%), while 54% rely on an employee pension and 13% hold a stakeholder pension. Overall 69% admitted that pension worries plague their retirement plans.

Interestingly, confidence is higher among Self Invested Personal Pension (SIPP) investors, with over a third (36%) of these saying they are confident in their retirement plans, compared to an average of just 29%. Confidence is lowest among people with a stakeholder pension, where just 25% of savers are confident in their retirement provisions

The research indicated that the average age for retirement is 65, although of those questioned, 34% stated they want to retire by 60. Worryingly, among those concerned about their pension provision, 73% have no idea how long it will take to grow their savings or for savings to recover to a level that would provide them with a comfortable retirement. Seven per cent of those who are concerned about their savings think it will take six to 10 years to grow or recover and a further 7% think it will take more than 15 years.

Those who do want to retire at 60 could have their work cut out if they haven't started saving yet. For example, J.P. Morgan Asset Management calculates that a male wanting to retire at 60 with a pension of £2,500 per month, have his pension increase with RPI and take his full tax free cash on retirement but make no provision for a spouse's pension, would have to contribute £372 per month if he started saving at 20 and £1,221 per month if he started saving at 40, based on a 7% growth assumption and RPI of 2.5%.

Peter Feasey, Head of J.P. Morgan WealthManager+ comments. "At a time when investors are looking to take more control of their retirement planning, and the removal of the Default Retirement Age, more people are considering their pension options for the future. In the approach to tax year end, a SIPP is a good way for confident investors to make the most of this tax efficient wrapper to invest in a wide range of funds and assets. Charges can often be lower than a traditional pension plan and managing a SIPP through J.P. Morgan WealthManager+ offers further choice, control, flexibility and transparency to ‘do it yourself'.  The J.P. Morgan SIPP allows investors to take advantage of a wide range of assets including Investment Trusts, managed funds, such as OEICs and SICAVs, as well as providing access to funds from other leading UK fund managers plus equities and Exchange Traded Funds."