Britons urged to ‘make money last’ as retirees worried about how to make ends meet
'People put their heads in the sand' with retirement says expert
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Retirement can bring a long awaited relief for Britons as they relax into a life usually without work, and where they get to chase some later life goals. However, retirement can also last for decades, with an increase in life expectancy meaning people spend more of their adult lives in retirement than ever before. This means many individuals will have to consider the financial implications of their retirement in conjunction with any desire to leave the workforce. This, understandably, can involve great deals of effort, which new research has unpacked. A study undertaken by abrdn has shown some 37 percent of Britons who are retiring this year say they do not believe they have enough money to last through their full retirement period.
Of the soon-to-be retirees, many are already considering the type of adjustments they may be required to make in order to get by financially during their later life, without the support of regular income through wages or a salary.
Nearly half of those asked said they plan to reduce their spending habits to support themselves in retirement, while nearly one in three said they expect to continue to work part time.
Some individuals are also considering the assets they have at their disposal to help them in later life. A fifth of those asked in the abrdn survey said they plan to sell their property in order to cover the cost of their retirement.
But for those who are afraid of what the future might hold financially, experts have advised acting, rather than burying one’s head in the sand over the matter.
Ben Hampton, Retirement Advice Specialist at abrdn, said: “With retirement potentially lasting 30 years or more, it’s vital that people are fully aware of how they’re going to make their money last.
“After the last few years, we think initiatives like Pensions Awareness Week are more important than ever for people to get back on track with retirement plans after so much upheaval in other parts of their lives.
“Being aware of how much you will need to meet your retirement goals, how much you can afford to spend and how this could change as the years go on, as well as considering how to piece together different types of income options, can be daunting. This is why preparation is key.
“The Government’s health and social care levy announcement adds a new element to the retirement planning puzzle. If you decide to work part time through retirement, especially after state pension age, you’ve got a new dynamic in the mix.
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“Speaking to an expert will help you plan so you can take full advantage of the options available to you.”
However, although there have been some concerns expressed about whether individuals are financially prepared for their retirement, research has shown that many are looking forward to the increased flexibility they will have in later life.
Some 96 percent of those asked said they are emotionally ready to retire, with 76 percent looking forward to the freedom to have their own schedule, 56 percent to not having to work, and 55 percent hoping to spend more time with their cherished friends and family.
While more than eight in ten said they are ready for the change in lifestyle from their current working pattern, nearly 17 percent said not having a regular routine does fill them with a certain sense of worry.
Mr Hampton added: “Emotional preparedness is a vital factor to think about when it comes to retirement, and plays a huge part in the financial considerations.
“When you feel ready to retire, and know what you want your retirement to be, it undoubtedly influences what the financial profile of your retirement will look like.
“The big lifestyle changes that retirement transition brings can be unsettling, and particularly so if you don’t have a plan in place.
“A well-developed retirement strategy will help give you the confidence that everything is in place to help deliver the retirement that you want.”
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Those who are worried about their finances in retirement are generally urged to take stock of what they have saved as soon as possible to ensure they are on track to meet the goals which they may have previously set out.
Individuals will also be able to utilise services such as Pension Wise, a free and impartial service set out by the Government back in 2015. It offers guidance on defined contribution pension options to help Britons get on track for their retirement.
Some may also wish to procure the services of a financial adviser to offer tailored assistance specific to their personal circumstances.
For finances, people can also speak to Citizens Advice, or use online services such as the Government-backed MoneyHelper to offer further assistance.
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