New Research Shows Woeful Lack Of Later Life Planning For Over 55s
A third of over 55s are either retiring later because of the pandemic or haven’t made any retirement plans at all, according to a new survey.
Research from leading national law firm Irwin Mitchell and top market research firm YouGov surveyed UK adults age 40+ about their attitudes towards savings and retirement plans during the pandemic, exposing a worrying lack of retirement planning from the over 55s cohort.
While 54% of respondents aged 55+ hadn’t changed their retirement plans, 12% said they now planned to retire later because of the pandemic, and a fifth (21%) of those who plan to retire said they hadn’t made any retirement plans at all – despite only being ten years away from the state pension age.
The most concerning statistic involved those who plan on retiring being asked if they knew what income they needed to retire on - with 38% of over 55s saying they didn’t know what income they needed.
The findings have worried later life planning experts at Irwin Mitchell, who say the results are indicative of a chronic underestimation around how much planning for later life will cost.
Expert Opinion“The pandemic has certainly changed everyone’s plans to some extent this year, to the point where respondents in our survey said they planned on retiring later – perhaps due to using savings to keep a business afloat, or increased living expenses.
“It’s certainly an indication that many don’t have enough saved up for retirement, and that people would benefit from talking to a professional, whether that’s a lawyer or a financial planner, to see what options are available to them.
“The fact that over a fifth of respondents had no retirement plans at all is yet more evidence that the Government needs to step in now in order to make sure there isn’t a generation of people who are left working longer for a less comfortable retirement. Social care is a key part of the later life puzzle, or we risk many being left behind on insufficient savings and pensions.” Kelly Greig - Partner
It’s possible over 55s are relying on property wealth to fund later life – in a previous report earlier this year by Irwin Mitchell with Cebr, the findings showed the total value of equity in homes owned outright by people aged 65 and over with two or more spare bedrooms was £1.2 trillion in 2017/18.
When asked whether they had ever taken professional advice to plan for their retirement, 64% of over 55s who plan on retiring hadn’t taken legal or financial advice, but these over 55s were more likely than younger age groups to have taken financial advice, with 30% choosing this option.
Expert Opinion“It’s good to see a sizeable percentage of over 55s taking some financial advice for retirement planning – but the fact we’re seeing 38% of them not knowing how much income they need to retire on is very concerning.
“Many people think that financial planning doesn’t apply to them because they’re not wealthy enough to justify it, but a financial plan is about more than just what to do with your cash in the bank. Cashflow planning, for example, is vital to help understand the type of lifestyle people can afford in retirement, while still aiming to have money left over in later life.
“The second point is that financial planning is becoming more accessible than ever, particularly as the pandemic has forced the industry to innovate. Whether it’s a virtual assessment, looking for advice on a specific area of your finances or starting up an investment portfolio for the first time, financial planning is no longer just for the wealthy.
“Planning for retirement is one of the biggest investments you can make for yourself and your loved ones, and a pandemic is certainly an event that puts these things into perspective. Our advice is not to delay.” Jason Mountford - Financial Planner