Two thirds (66%) of 2021 retirees risk not having the pension savings to sustain their planned retirement income, according to a new report from Standard Life Aberdeen. The report also says that almost two in five (37%) 2021 retirees have accelerated their retirement plans due to Covid-19.
After surveying UK adults planning to retire this year, the research found that a 2021 retiree plans to spend, on average, £21,000 a year in retirement – almost £10,000 less than the average UK household income (£29,900)*.
However, looking at their pension pots, and factoring in the money they’ll receive from their State Pension, analysis shows that two thirds (66%) are at risk of running out of money.
The average value of a 2021 retiree’s pension pot is £366,000 – but a third (33%) admitted to having less than £100,000 saved.
John Tait, Retirement Advice Specialist at Standard Life Aberdeen, said: “Retirement is a marathon, not a sprint, and many could be going into it without sufficient preparation or planning.
“Pension pots are without a doubt the most popular option for funding retirement, but it’s so important that retirees consider any other savings or assets they can use when deciding whether they can afford to retire or not.”
The research also found that more than a third (37%) of those planning to retire this year are worried about not having enough money to last throughout retirement.
Just two in five (39%) feel very confident that they’re financially ready to finish working this year, with a third (34%) of women feeling very confident versus two in five (43%) men.
Almost half (48%) are planning to reduce their usual spending to support themselves in retirement, while a quarter (27%) will work part-time to help financially. One in five (21%) are planning to sell their home or downsize to fund retirement.
Changing retirement plans
Lockdown changing their retirement plans, health worries due to the pandemic and job uncertainty were the three main reasons for speeding up their retirement.
However, there are clearly some apprehensions about retiring during a pandemic amongst this year’s retirees. More than half (51%) are worried about not being able to do things they planned, while two in five (43%) are concerned they won’t be able to see friends and family.
When it comes to their finances, three in ten (29%) have concerns about their pension falling in volatile markets, and almost one in five (17%) have seen their income fall over the past year.
How are YOUR retirement plans faring?
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