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Catch up with the latest press releases from LV=

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One in four face health shock in first five years of retirement

Press release: 11/08/2010

  • 24% of pensioners said their health had worsened in the first five years of retirement
  • 17% of new retirees hit by sudden need to support family members financially
  • LV=’s survey highlights the need for financial flexibility in retirement and the dangers of locking into a Lifetime Annuity too early

Research from leading flexible retirement solutions provider LV= reveals that for millions of Britain's retirees the first five 'golden years' bring unexpected life change and financial strain.

Almost a quarter of retirees (24%) said their health had worsened or they had suffered a serious health issue in the first five years of retirement, while 17% said they had needed to unexpectedly dig deep to support family members financially.

Over one in three retirees (34%) celebrated a new grandchild being born within the first five years of retirement. A further one in four 'new retirees' (25%) moved house within the first five years, and one in five (20%) updated or renovated their existing property or garden, making the most of their extra free time.

Matt Trott, LV= Head of Annuities said: "Many people associate retirement with taking things easy and relaxing. However, it is a time when major step changes in their lifestyle can take place. It is therefore important that people build the flexibility into their retirement planning to deal with these changes. Any unexpected strain on their finances in the early years of retirement could have a significant knock-on effect further down the line."

"The majority of people currently fix themselves into an annuity product for life at the point of retirement, and while this may work for some, building in a level of financial flexibility during the early years of retirement could help them cope with surprises, whether nasty or nice."

Where the financial strain comes from for new retirees

Did any of the following happen within five years of retirement?


A grandchild was born


Moved house


Had a serious illness/worsening general health


Updated/renovated a property/garden


Sudden need to help family members financially


Received an inheritance


Widowed/bereaved (partner)


Returned to work


Relocated to another country


Source LV= June 2010

Trott continued: "There is so much uncertainty in the world at the moment. People are living longer, they have to deal with new pressures, and their savings are not stretching as far as they would like. In addition, the structure of the entire at-retirement financial services market is under review, so who knows what life will look like in five, 10 or 15 years time?"

"Annuities are a great option for those wanting security and a low risk income. However, being locked into a lifetime annuity is not always the ideal option for everyone, particularly for those who are relatively young and in good health. For those in impaired health locking into an enhanced annuity is actually a good thing."

"There are thousands of people coming up to retirement every week, entering the unknown and trying to transition between working and retired life. Many of these people will find themselves in a very different set of circumstances five years down the line, and it could then be too late to change the way they can access their retirement funds. Therefore, it's important people make sure they understand all the options available to them, both immediately and later in retirement. We would always recommend that people coming up to retirement seek specialist independent financial advice, and always look at the market as a whole before locking themselves in with their pension provider, as they could secure a greater income in retirement elsewhere.

In February 2010, LV= launched the Protected Retirement Plan, a fixed term retirement product, offering the security of a fixed income over a fixed period without being locked into a lifetime deal. It also offers people the flexibility to review their options at the end of the fixed period while offering a guaranteed maturity value from the outset.

The new Protected Retirement Plan from LV= is designed for people who wish to combine some of the security of a traditional annuity with the ability to reassess the required benefits after set periods of time to ensure that it meets their individual needs. It has been developed to provide the breathing space needed for people to be able to plan and build a strategy that will keep them financially secure.

All figures taken from omnibus research carried out by Opinium Research on behalf of LV=. An online poll of 1,557 British adults, all aged over 50, was carried out from 2-7 June 2010.


LV= is a registered trademark of Liverpool Victoria Friendly Society Limited (LVFS) and a trading style of the Liverpool Victoria group of companies.

LV= employs around 4,000 people, serves over 3.8m customers and members, and manages around £9.5bn (as at 30 June 2010) on their behalf, via LV= Asset Management (LVAM). We are also the UK’s largest friendly society and a leading mutual financial services provider.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.