Financial security remains a concern for retirees in the UK

Only 48% of mid-retirees are confident their private pension will last a lifetime

A new report has revealed troubling insights into the financial confidence of retirees in the UK. Alarmingly, just under half (48%) of mid-retirees feel assured that their private pensions will sustain them throughout their lives. This leaves the remaining half grappling with uncertainty, despite decades of planning and saving. The report paints a disheartening picture of financial security in retirement.

One of the most striking aspects is the disparity in financial confidence between genders. While 32% of men reported feeling secure about their finances, only 19% of women felt the same. This underscores an urgent need to address the gender gap in retirement planning, as women are disproportionately affected when it comes to financial security in later life.

Growing need for income stability

The research highlights how financial priorities evolve as retirees age. An overwhelming 83% indicated that the need for a steady income from private pensions becomes increasingly important over time. Unsurprisingly, the same percentage expressed concern regarding the potential decrease in their income. Here, too, women displayed greater anxiety (87%) compared to men (79%).

These findings indicate a growing demand for solutions that ensure income stability. Nearly two-thirds (64%) of respondents believe private pensions should serve as sources of income for life, rather than merely functioning as flexible savings pots. However, despite their importance, these essential pensions are often managed without ongoing professional guidance.

Call for regular financial reviews

What’s clear from the report is that many mid-retirees have adopted a “set and forget” approach to their pensions, which could prove detrimental in the long term. While retirement planning traditionally focuses on the lead-up to retirement, the findings underscore a pressing need for ongoing financial reviews during retirement itself. Just as regular health check-ups safeguard your well-being, frequent financial MOTs could play a vital role in keeping your retirement plans on track.

One suggestion made by experts is the concept of a mid-retirement MOT. This would act as a thorough financial and lifestyle review, providing guidance on estate planning, fraud protection, access to state benefits, and strategies to manage finances if cognitive decline becomes a concern. By re-evaluating your financial situation every few years, you can better prepare for the unpredictable years ahead.

Innovative solutions for long-term needs

For many retirees, the challenge lies in balancing flexibility and security in managing their pension savings. The report recommends adopting “flex first, fix later” strategies. This involves utilising pension drawdowns during the early stages of retirement, combined with annuities in later life to guarantee income stability. Such blended approaches could offer retirees the financial adaptability they require early on while safeguarding against unexpected shortfalls later.

The findings also illuminate a systemic issue. Despite the increasing complexities of managing retirement incomes under pension freedoms, 65% of respondents believe there is insufficient support for retirees navigating these challenges. This underscores an urgent need for improved advice and accessible resources tailored to every stage of retirement.

Don’t sleepwalk through retirement

The report illustrates how many retirees are sleepwalking through critical financial decisions in later life. They belong to the first generation facing pension freedoms, and the complexity of these choices requires increased support and education. Without adequate planning, the risk of financial instability during the latter years of retirement poses a significant danger. Taking action now can avert considerable hardships in the future.

Take control of your retirement plan

Ensuring that your private pension meets your needs throughout your life requires preparation, informed decision-making, and regular reviews. Whether you are currently managing your pension or need assistance in optimising your income strategy, the right professional financial advice can make all the difference.

If you’re concerned about your financial future or would like to explore ways to secure a lifelong income, please get in touch with us. Together, we can evaluate your retirement plan and help you create a solution tailored to your needs. Your future deserves the utmost care.

Source data:

[1] Ignition House is a research consultancy specialising in market research and consulting. The report is based on an online survey Ignition House conducted with a nationally representative sample of 1,000 UK people aged 65-75 years old who hold a non-advised private pension, excluding people in receipt of state pension only and those with more than £20,000 defined benefit pension household income. Research was conducted from October to November 2024.

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