Planning mistakes leave UK retirees struggling financially
More than two-in-five (41%) pensioners regret some of the decisions they made before and after their retirement, which have left them struggling financially, according to Prudential. The recent study found that, despite 94% of recent retirees saying that they are enjoying retirement, nearly a third (32%) are leading a less comfortable lifestyle than when they were working and feel that decisions made both before and after retirement have impacted their quality of life.
Too little too late
Of those retiring in the past five year, 19% say that in hindsight they didn’t realise they hadn’t saved enough for their retirement, while 15% regret not starting to save earlier. Many pensioners also regret not thinking hard enough in advance about their early years in retirement. One-in-10 wish that they had set a budget to live on, while 13% regret overestimating how much they will receive from the state.
When asked about their retirement income 72% receive the state pension, 64% have a final salary pension scheme, and just under half (48%) have cash savings or an Isa. Over a quarter (28%) have stocks and/or shares and 21% have annuities. “The fact remains that the best way to secure a comfortable retirement is to save as much as possible as early as possible in your working life.”
Money ≠ happy retirement
Greg Pogonowski, a retirement income expert at Lime Financial, said: “The fact that virtually all recent retirees are enjoying life after work, despite a few regrets about their decision-making, shows that money isn’t the be all and end all of a happy retirement. However, sooner or later, the financial choices made while still at work or shortly after retirement will have an impact on the lifestyles of many pensioners. For people who have saved all their working lives, the financial choices they make when they retire could be the biggest and most important they make during their lifetime. The new Pension freedoms mean that choices are now broader, and in some cases less set in stone, so most people will benefit from a consultation with a professionally qualified Independent Financial Adviser before committing to their retirement finance decisions.
The fact remains that the best way to secure a comfortable retirement is to save as much as possible as early as possible in your working life – a discipline that many of Prudential’s respondents say they regret not getting into before giving up work.
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