5th November 2015
A recent Old Mutual Wealth/YouGov survey of over 1,500 UK adults between the ages of 50 and 75 uncovered some interesting issues and trends.
People expect their retirement to last for 21 years on average, but those already in retirement are experiencing a 25% shortfall between the income they expected and what they are achieving. Their income averages £19,000 against a pre-retirement target of £23,700, although those who sought financial advice were more than twice as likely to achieve their target, their average income being £26,000.
People are making up the shortfall in their retirement income in a variety of ways: semi-retirement is very popular with 30% of people expecting to keep working part-time; ISAs and property (buy to let) are becoming increasingly popular forms of alternative investment. Equity release is also on the rise.
With so much more freedom now available to people with regard to their pensions, and consequently many more options to consider across the financial instrument board, the survey also concludes that there is a worryingly low understanding of concepts such as pension drawdown.
With such confusion abounding – and the value of financial advice once again underlined – perhaps the overall conclusion we can draw from reports such as these is that it is always best for those approaching retirement to consult a qualified financial professional.
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