- One in four (27%) people approaching retirement have changed their plans since the vote to leave the EU.
- Many say they will delay retirement, or take a ‘wait and see’ approach.
- Confusion is rife, but people still aren’t planning to take advice.
New research from LV= reveals the UK’s decision to leave the EU has left over two million¹ people planning to change their retirement plans.
The survey of those approaching retirement found more than one in four (27%) have changed their retirement plans in some way as a result of the economic environment following the vote.
Of those changing plans, nearly a third (30%) say they’re definitely postponing their retirement and continuing to work instead – equivalent to 690,000 people. A similar percentage (33%) are planning to ‘wait and see’ how the economy pans out.
Even among those who haven’t necessarily changed their plans, around four in 10 (43%) say they would ‘work on’ rather than retire in the current climate and more than a third (36%) would wait until Britain leaves the EU before making any decisions.
Unsurprisingly, the turbulence in the economy has left a third (32%) feeling confused about their options and a quarter (25%) are worried that the vote has affected the value of their pension. However, despite consumers’ uncertainty, only around one in ten (12%) said they’re now more likely to take financial advice.
John Perks, Managing Director of Retirement Solutions at LV= said: “It’s undoubtedly a tough time for those approaching retirement, with low annuity rates and turbulence in the financial markets. This means it’s even more difficult for retirees to know what is right for them, making it vital they have access to impartial guidance and regulated financial advice so they can understand all their options and get the best deal.
“It’s also important people understand there are options available if they don’t want to delay and do want to retire now. Products do exist that can help people ride out the storm, for example, a fixed-term annuity offers a guaranteed income for a set period without tying someone in for life. No matter what people decide to do, taking advice at retirement has never been more important.”
LV= has produced some top tips for those worried about their retirement prospects:
- Think about all of your assets - If you’re worried about the value of your pension, remember you may have other assets that could help with your retirement, including other savings or investments or equity in your property. You should also make sure you identify any lost pension pots using the Pension Tracing Service.
- Check your State Pension - If you’re eligible to start drawing your State Pension this could offer you some income without you having to start taking money from your personal or workplace pensions. Checking how much you’re eligible for is quick and easy to do online.
- Get help - The Government’s free service, Pension Wise, provides impartial guidance to help people understand their options at retirement. This won’t provide you with a personalised recommendation, but it is a good starting point. You can call 0800 138 3944 to book an appointment. You should also consider taking regulated financial advice is this is the best way to ensure you get the right products based on your individual needs.
- Consider different products - Most people will be familiar with annuities that provide a fixed income for life, and many also know about income drawdown products that allow you to take your money more flexibly. But there are other products available, like fixed-term annuities, which provide a guaranteed income but with the flexibility that you’re only tied in for a set period of time. You can also use a mix of products these days so that your needs are met throughout retirement.
- Most of all, take your time - Overall, the most important thing is to ensure you don’t rush into a decision and you take the time to consider all the options available – after all, it’s your money and it’s your choice.
LV=’s Retirement Wizard offers fully regulated, online retirement advice for just £199.
Notes to editors
¹ There are 17.6 million over-55s in the UK (ONS population maps). 10.2 million are over 65 and of these around 1 million still work (DWP). This leaves a population of 8.4 million UK adults aged 55+ and NOT retired.
Of the over-55s surveyed, 27% said they’d changed their retirement plans somehow due to the vote to leave the EU (equivalent to 2.3 million people). Of these people, 30% said they would definitely postpone retirement and continue working as a result of the economic environment. 30% of 2.3m = 690,000 people postposing retirement.
Methodology:
LV= commissioned Opinium Research to conduct bespoke research among a sample of 1,000 UK residents who are over 55 years of age and NOT yet retired. Surveys were conducted online between 8th and 14th December 2016 and are nationally representative.
About LV=
LV= serves over 5.8 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.
When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.
We offer our services direct to consumers, as well as through IFAs and insurance brokers.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. LVFS is a member of the ABI and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.