Posted on: 2nd Oct 2018
More than half of individuals aged 55 or over, see their financial security as a top priority when it comes to preparing for. However, a third of people choose to spend more time choosing a new car to purchase. This is according to the latest research from Legal and General.
Not enough are preparing for retirement
It seems that around one third (32 per cent) of retirees spend less than a week making decisions regarding theirincome arrangements. This is compared with the 40 per cent who claim to spend more than a week purchasing a new car.
This statistic comes in spite of more than half (52 per cent) saying that financial security is their main priority when it comes to retirement. Only 30 per cent say to have never worried about taking their money out early.
More people must do their research
The findings, revealed last week (24th September) in L&G’s Price of Freedom research, come from a study of over 2,000 members over the age of 55. The study also shows that around 3 in 5 (58 per cent) members who are yet to retire hadn’t researched the available options for accessing their pension pots.
Almost 1 quarter (23 per cent) were also unable to say the rate that would represent good value for money on their pensionsavings. At the same time, 40 per cent believe that a rate of return between 3 per cent and 7 per cent would represent ‘good value’.
Emma Byron, managing director at L&G retail retirement, commented, “The flipside of the flexibility offered by pension reform, is that we are all now responsible for making sure our pension pots will last through our retirement. But, as a nation, we are not spending enough time thinking about this, and about how we want to use our pension.”
Guaranteed income was considered to be the key to having an enjoyable retirement, according to 29 per cent of respondents. Property, however, was viewed as a representation of better value for money than annuities among those who were familiar with the available options.
Byron believes that providers need to make more effort to communicate with their members when it comes to their retirement options. This communication must be made jargon-free in order for their members to have a clearer understanding.
“Our research shows that for retirees who want clarity and certainty around the affordability of their planned retirement, annuities clearly have the potential to meet their needs,” she said. “But, there is still work to do for all of us in our sector, to ensure that planning retirement and choosing how we access our pension are clearer and hassle-free.”
At Haven IFA, we believe that it is more important than ever that you have a clear understanding of the retirement options available to you. If you would like to talk to someone about your plans for the future, get in touch. We would be more than happy to help determine what path is best for you to go down when retirement comes around.