"The research in this whitepaper clearly shows that there is unease in the UK when it comes to retirement finances"
Age Partnership have surveyed British adults of all ages and analysed industry research to find out the real state of the UK’s retirement finances.
Is the UK on track to suffer a financial shortfall?
Real retiree living costs are currently £208 according to the whitepaper, however basic state pension is £122.30 per week. Leaving a deficit of £85 per week. That’s £340 per month retirees need to find from other sources.
It’s no wonder then that the non-retired population are looking at other ways to raise funds for life after work. The further away Brits are from retirement the less likely they are to rely on state pensions, this could be as 39% are worried that the Department for Work and Pensions implementing policy changes that affect their funds.
Retirement planning
The workplace pension will be used by half of future retirees. 50% of those approaching retirement in the next ten years will, and 49% of those not approaching retirement yet are also already planning to use one. Those who are not retired contribute on average 3.5% of their salary which is being matched by employers (3.6%).
The survey findings showed that the further you are from retirement, the less likely you are to have a private (or “personal”) pension plan though. According to the FCA, 15.1 million adults in the UK that aren’t retired are not paying into a pension.
Property is another popular choice for funding retirement, with 1 in 10 planning on downsizing, and 1 in 20 planning to use equity release. The average Brit approaching retirement in the next 10 years plans to raise £62.1k from downsizing and £61.1k from equity release.
The Equity Release Council reports that equity release is an increasingly popular way for retirees to raise funds, their Autumn 2017 market report showed that the number of products on the market has increased 225% in the last decade. Yet with younger Brits struggling to get on the housing market, this raises questions about whether growth can continue.
Justin Wysocki, Marketing Director from Age Partnership, said: “The research in this whitepaper clearly shows that there is unease in the UK when it comes to retirement finances. The uncertainty around how to prepare when younger and the best way to use our assets can be daunting.
That’s why we launched this campaign, to highlight the importance of being educated and aware on retirement issues. Whether you’re already retired, approaching retirement or even if it feels a million years away. Early preparation is key to ensure you can live comfortable after work.”
