Over-60s in the South-East unprepared for retirement, report warns
An alarming number of the South East's working over-60s population are unprepared for their retirement, according to findings from a new white paper published by financial group Sanlam.
The Which Way Forward? report suggests that an increasing ageing population, the demise of generous final salary schemes and the pension freedoms introduced last April are all contributing to a radically shifting retirement landscape.
As a result, 33% of non-retired over-60s in the South-East today feel unprepared for their future.
The report, which uses qualitative research, compares the attitudes of 1,000 people who have retired in the last five years with 1,000 over-60s approaching retirement.
It suggests there are many who still feel in the dark about their retirement, with 28% in the South-East saying they weren’t aware of the new pension freedoms which the government introduced in April 2015.
Sanlam says the results are surprising, particularly given the new freedoms were intended to give future retirees more autonomy with their savings. Some 36% of over 60s in the South-East admit that they are unaware of how much they currently have in their pension pot.
Running concurrently with this uncertainty, future retirees also now envisage a longer working life than previous generations. Less than 2% of pre-retirees in the South-East anticipate retiring before the age of 61 and around 34% expect to still be working at 70 and beyond.
The report suggests that fixed-age retirement has already become an outdated concept and will no longer be possible for the majority of the current working generation. Whilst Britons have traditionally worked towards a fixed retirement date, three in 10 pre-retirees in the South-East now envisage partial retirement which is phased in over a few years.
Commenting on the findings, David Dunn, pensions specialist and author of the Which Way Forward? paper, said: “The face of retirement planning is changing. Following the Government’s new pension freedoms introduced in April, people now have more choice as to how they use their pension pots. Although this gives people more flexibility to organise their finances, it also brings extra responsibility when making such important decisions. Sanlam’s Which Way Forward? report provides deeper analysis of the current retirement process and an insight into changing consumer behaviour. The contrast between decisions made by those who have recently retired and now those approaching retirement clearly shows that a seminal change is taking place. It is now time for the Government and pension providers alike to be innovative and provide retirees guidance and products to suit the new ‘normal’ of retirement.”
Nick Parry, Head of Proposition Sanlam UK said: “Sanlam commissioned this report as a means of understanding the new factors affecting those approaching and taking retirement. The research shows that the era of annuities and traditional pension planning is over. Unless the pension industry grasps the current climate and truly understands changed consumer needs, it will not be able to provide appropriate products and advice.”
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