The LV= Income Roulette Report reveals that more than a quarter (28%) of people expecting to retire within the next five years don’t know how much they have in their pension pot. In addition to money worries, some did not feel emotionally ready for retirement with one in six (16%) admitting they were worried they would not be as intellectually stimulated and one in ten (12%) worried they would not know what to do with their time.
The research also reveals two in five (42%) of those who have already retired feel their financial situation has significantly worsened since doing so. Furthermore, over a third (35%)2 of retirees feel they’re often hit with unexpected costs like home maintenance, car repairs, or helping their children or grandchildren, meaning they frequently find themselves financially vulnerable.
LV= is encouraging people to start planning and seeking the necessary advice earlier so that they can make the transition into retirement with greater confidence. A robust advice process will include encouraging anyone considering their retirement financial planning to compare their current monthly outgoings with their expected outgoings in retirement. This will give a clear indication of the level of income required.
To further help people prepare for retirement LV= has produced video interviews with three already retired people who share their real-life stories, the steps they took to get ready for retirement and the lessons they’ve learnt since.
Steve Lewis, LV= Retirement Director, said “It’s widely reported that over 55s are experiencing a golden age when it comes to their finances. Entering retirement should be an exciting time, but our research shows this doesn’t automatically mean this group is confident about their retirement plans –both from financially and emotionally. While, on the one hand, ‘pension freedoms’ offer people more flexibility and choice, on the other, it demands they take greater responsibility on them of their own financial affairs.”
“It can also help for people to think about where their different pension pots are and if they would be better off bringing them all together in one place. This can ensure they enter retirement with confidence and control over their savings, and greater choice about how to take an income that will provide everything they hope for from retirement.”