UK RETIREES INCREASINGLY RELYING ON THE STATE PENSION
Last autumn, the Financial Conduct Authority unveiled its Financial Lives Survey1, a study that tells us much about the financial arrangements made by adults of all ages in the UK.
One of the findings was that 31% of UK adults, around 15 million people, have made no pension provision to supplement their state pension entitlement and therefore could be facing a bleak future in retirement. The report highlighted the number of people aged over 50 who are not contributing to a pension and only have a few years left to build one up before they reach their 60s.
When questioned about their lack of provision, 32% of respondents said they feared they had left it too late, 26% said they were unable to afford one, and 12% said they were relying on their partner’s pension to provide an income in retirement.
Confusion surrounding pensions
Despite nearing retirement, around a quarter of those in defined contribution pension schemes didn’t know how much they had in their pension pot. Worryingly, 18% of those who have accessed a defined contribution pension in the last two years weren’t able to confirm what they had done with their money, so didn’t know if they had taken an annuity or gone into income drawdown.
Everyone approaching retirement deserves the best and most comprehensive advice which looks not only at their pension requirements, but at their wider financial planning needs. This should include a review of existing investments and savings, and financial goals such as passing money on to future generations.
Help is at hand
Whatever stage of your working life you’ve reached, it’s important to take professional advice about your pension. More and more people are realising that it’s never too late to act on their retirement planning, or too early to get their pension arrangements on track. After all, retirement should be an enjoyable and fulfilling stage of life, not a time spent worrying about money.
If you’re self-employed, an employee, work part-time, run your own business or have accumulated pension pots with past employers, your adviser can offer you the right advice to help you build up your pension pot in a tax-efficient way. And when you reach retirement, taking advice can help you make the best choices for your pension savings, and help ensure that your money lasts throughout your later years.
If you’re making plans for your retirement and would like some professional advice, then please get in touch.
1FCA, Financial Lives Survey, Oct 2017
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.