Two-thirds of people expected to retire in 2021 run the risk of not having the pension savings to maintain their planned retirement income. This comes from a new report released today Standard Life Aberdeen.
In its first Class Class report, surveying UK adults looking to retire this year, Standard Life Aberdeen showed how ready the class is to retire by 2021 and identified which ones Worries and excitement excite them the most and how recent events have affected their plans for retirement.
The research found that in 2021 a retiree would want to spend an average of £ 21,000 a year on retirement – almost £ 10,000 less than the average household income in the UK (£ 29,900).
However, if you look at their pension pots and take into account the money they receive from their state pension, the analysis shows that two thirds (66%) are at risk of running out of money.
The average value of a 2021 class retirement pot is £ 366,000 – but a third (33%) admitted having saved less than £ 100,000.
John Tait, Age Advisory Specialist at Standard Life Aberdeen, said, “A large number of people who are retiring this year are at risk of running out of money when they retire. Retirement is a marathon, not a sprint, and many could do it without adequate preparation or planning.
“Retirement pots are without a doubt the most popular option for funding retirement, but it is so important that retirees consider any other savings or assets they can use when deciding whether or not they can afford to retire Not.”
The Standard Life Aberdeen research also found that more than a third (37%) of those looking to retire this year are concerned about not having enough money to complete retirement.
Only two in five (39%) are very confident that they are financially ready to quit this year. A third (34%) of women feel very confident about two in five (43%) men.
Almost half (48%) plan to cut back on their usual expenses to support themselves in retirement, while a quarter (27%) work part-time to help out financially. One in five (21%) plans to sell or downsize their home to finance retirement.
John said, “It can be difficult to understand what money you have on retirement and how to spend it wisely, but this is where preparing and speaking with an expert can help.” Circumstances or priorities can change, especially if you retire in the middle of a global pandemic. However, it’s much easier to customize a plan you already have than if you had to start from scratch. “
Although many admit to worry about whether they are financially ready to retire this year, Standard Life Aberdeen’s research found that nearly two in five (37%) of the 2021 class were due to Covid have accelerated planned retirement date in the past 12 months -19.
Lockdown, which changed her retirement plans, health concerns from the pandemic, and job insecurity were the three main reasons behind her speeding up her retirement.
However, there are clearly pandemic retirement concerns among this year’s retirees. More than half (51%) are concerned that they will not be able to do the things they planned, while two in five (43%) fear that they will not be able to see friends and family.
As for their finances, three in ten (29%) have concerns that their pensions will decline in volatile markets, and nearly one in five (17%) have seen their income decline over the past year.
Ben Hampton, Director of Retirement, Standard Life Aberdeen, said, “Deciding how and when to retire is one of the biggest life decisions and transitions we make. Longer life expectancies, volatile investment markets, and ever-changing regulations can make planning and preparing for retirement confusing, not to mention the impact the coronavirus pandemic has on people’s immediate and longer-term financial priorities and plans.
“Whatever the plan, when it comes to the decision to retire, most people understandably find it daunting. Even more so if you don’t feel prepared. We hope the results of our research will help inspire tomorrow’s generation of retirees and spark a spark within them to create a plan they can trust for their retirement. “
Standard Class Aberdeen’s Class of Report also asked 2020 retirees to see how they were doing. Despite Covid-19, seven in ten (70%) said they were satisfied with their decision to retire last year.
Not having to go to work is what the 2020 class enjoys most about retirement, followed by free time and spending more time with family.
More than a third (34%) enjoyed taking up new hobbies – the main ones being gardening, fishing, and baking.