Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/money/article/a694582
Old vs young: who is more prepared for retirement?
Older people are increasingly unready for retirement but younger workers are finally pulling their heads out of the sand.
by Michelle McGagh on Jul 31, 2013 at 09:00
You could be forgiven for believing young people are indifferent to saving for their old age, preferring to live for today but new research shows younger people are now more likely to save for their future. In fact, they could set some examples for those in the 55-plus age group who are unaware of how much they need to live on.
Most over 55s expect to retire at 65 but the retirement readiness survey from pension provider Aegon UK shows 30% have no pension plan in place to help them achieve this.
To make matters worse one in three over 55s don’t know how much they need to live on in retirement and just 15% believe their pension is on track to meet their retirement income needs.
All of this adds up to a very grim retirement for people in this age group. Unfortunately, it is too late for them to take advantage of the government’s workplace savings push and they will have to take matters into their own hands.
‘The number of people taking on [savings] responsibility remains too low, with a lack of readiness among those nearest the end of the working lives clearly a cause for alarm,’ said Duncan Jarrett, managing director of retail and at retirement at Aegon UK.
‘There remains a considerable gap between expectations of retirement and the reality. The reality is too few people are planning ahead to achieve the financially comfortable retirement they want, or ever expect.’
What can you do?
Glynn Jones, divisional director of independent financial advice firm LEBC, said older people still have time to make up the shortfall.
‘There are depressing delusions among people of 45 plus – they do not know where they are [in terms of pension] and reluctant to understand where they are,’ said Jones.
He said the first task was to put together a ‘schedule of assets’ which includes any pension savings, other savings and details of what you will receive from the state pension.
‘Get in contact with the Department for Work and Pension and find out what your state pension will be and when you will get it,’ he said, adding that many people had no idea the state pension age has increased for many.
To find out what you will receive from the state in retirement, contact HMRC: https://www.gov.uk/state-pension-statement
‘One you are clear where you are starting from then I do think you can make in-roads…in 10 years you can make a difference,’ said Jones.
More about this:
More from us
- Government needs big plan to tackle pensions crisis
- Retirement income pitfalls: more help needed
- The 'Retirement Smile': what income do you need in old age?
- Want to retire on £25K a year? You need to save £1,000 a month
- Why you need to work a day a week for your pension
- Number of over-65s in work jumps 10% in a year
- Women’s state pension: do you know your retirement date?
- Friday Five: financial pressures on pensioners
- Are pensions 'finished'? Yes, because ISAs are better
- Older workers just can't afford to retire
- Are you facing a mortgage 'time bomb' in retirement?
What others are saying
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.