Pensions and retirement are always hot topics and something I have great interest in, especially with how it fits in with my clients’ future desired lifestyle requirements. A recent national survey by Opinium Research looked into the expectations that people have about funding their life after retiring from work. The survey gathered respondents’ opinions according to age and gender across three age ranges – under35’s; 35–54 years and over 55’s, and in relation to ten potential retirement funding areas.

The findings show marked changes in the hopes and expectations of people as they age and get ever closer to retirement, and the reality of facing up to the economics of retirement and how they will afford to live.

The context of the survey is that all of us have to plan for our retirement if we expect to have one! We want to be financially secure and able to enjoy retirement in reasonable comfort, and the survey details at least ten ways in which we might expect, and indeed prepare, to fund our post-working future. The key Opinium survey question asked in relation to retirement planning options, was: ‘Which of the ten retirement funding areas do you expect to rely on for income in your retirement?’

  • The State Pension – 65% of all men and women answered yes, but a reality check seems to take hold as people get closer to retirement as 44% of under 35’s; 62% of 35 – 54 year olds and 84% of those aged over 55, answered yes! Perhaps a wake-up call to the younger is signalled here – ‘plan and save now or you may have to rely on the State!’
  • A Private Pension – 47% of all surveyed thought that a private pension would fund retirement, with more men than women. Does this reflect inequality in the pension futures and expectations for men and women employees?  Again across the age range the expectation of dependence on this form of pension increased – 39% (Under 35’s) to 56% for over 55’s. Does this reflect that during their working lives people wake up to the need to access and pay into a private pension scheme?
  • Other savings – just over a quarter of all men and women flagged up other savings as contributing to retirement income. However the survey indicated that again the over 55’s, with a 33% yes vote, had reached a greater acceptance of the need to save for retirement.
  • ISA savings –  very similar figures to the previous category and perhaps a tale of missed ISA savings opportunities earlier in life?
  • Inheritance – the expectation of inheritance income contributing to retirement income almost halved by the age of 55, perhaps with the realisation later in life that any anticipated inheritance just wasn’t going to come?
  • Money released from own home – an expectation for 10% across the age ranges, but declining to 7% for the over 55’s. Do we become more protective of our home asset nest-egg later in life or do we realise that the asset more recently has not grown as much as we hoped for?
  • My partner – 14% of women and 5% of men see income from their partner as significant in retirement with responses varying little across the age ranges.
  • Other investments, not in a pension wrapper – while only 8% of men and women overall expect such investment to contribute to retirement income, this figure increases from 4% (under 35’s) to 11% for over 55’s, perhaps again reality is kicking-in later in life. Let’s hope that this is not also an indicator of missed opportunities!
  • Rental income from an investment property – an anticipated retirement income source for around 5% of respondents, with a slight drop-off within the over 55 respondents. Buying property to let may not be something that the over 55’s warm to?
  • NEST (National Employment Savings Trust) –this incoming Government strategy for planned pension saving appears to have connected with only 4% of the Opinium survey respondents in 2012, with only 2% of over 55’s seeing NEST playing any part in their pension savings planning and income. How much are working people aware of NEST?

If the findings of this survey causes you concern in terms of your own retirement income requirements then please call me on 0116 2355733.

Sources: www.opinium.co.uk