One in three (31%) of generation X (people aged 42-57) are uncertain about when to retire, compared to 19% of Baby Boomers and older generations (aged 58 and above), according to new research from Standard Life.
A quarter (24%) of all UK adults admit they feel unsure about when to retire. 27% of females feel less assured about retirement timings compared to their male counterparts (21%).
Standard Life’s research, conducted among more than 6,000 people, highlights other aspects of retirement that are causing uncertainty with 25% feel unsure about whether to semi-retire or stop working completely, rising to 30% among Gen X and 23% are hesitant about how much they need for retirement (25% among Gen X)
20% are uncertain about how to access their retirement savings (rising to 24% among Gen X) and a further 20% don’t feel they understand their options around retirement (24% among Gen X)
Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group said “It’s worrying that many of those who have retirement in their sights are uncertain about when to retire, how much they’ll need and if semi-retirement might be a consideration. It looks like there’s a big generational difference emerging between people in the 40’s and 50’s and their older counterparts, likely in part due to the decline of Defined Benefit (DB) schemes, in which you’d get a guaranteed income for life from your employer based on your final or average salary, and the rise of Defined Contribution (DC) schemes, in which your overall retirement pot is made up of contributions from yourself and your employer, as well as investment growth.
“Many Gen Xers are caught between the decline of DB and massive expansion we’ve seen in DC savings in the last ten years as a result of auto-enrolment. DC pensions give you more freedom to access your money in the way you want to, but you have a lot more responsibility to make sure you’re saving enough to fund the whole of your retirement.
“Planning for retirement can feel complex and overwhelming, particularly as two years of high inflation and rising interest rates have led to shorter-term financial pressures dominating most people’s financial affairs. There’s a lot to consider, such as how long your savings need to last and what sort of lifestyle you’d like, and so it can be hard to feel confident that you’ve got the right plans in place. Breaking down your considerations into bite-sized chunks will make this process less overwhelming and easier to make choices based on these factors.”