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Financial fears for golden years?

28 November 2018 | Press Release


  1. Baby-boomers are enjoying a financial golden age, but lack of preparation spells worries for retirement
  2. Despite well-reported wealth, one in three (33%)2 of those nearing retirement don’t feel confident they’ll have the funds to live on
  3. More than a quarter (28%) of those approaching retirement don’t know how much they have in their pension pot, and 22% have less than £50,000
  4. Fears are compounded as research shows two in five (42%)2 of retirees feel their financial situation has significantly worsened since retiring
  5. Financial advisers can play a vital role in giving people more confidence and control over their savings to ensure they are ready for retirement.
Woman reaching retirement

Baby-boomers are better off than any other generation1 but one in three (33%)2 people nearing retirement don’t feel confident they’ll have enough funds to live on, according to a major report released today by LV=.

The LV= Income Roulette Report reveals that more than a quarter (28%)2 of people expecting to retire within the next five years don’t know how much they have in their pension pot. In addition, 51% of those facing retirement plan to spend their retirement funds on holidays, while 40% chose leisure activities and 23% focused on home improvements.

The research also reveals two in five (42%)2 of those who have already retired feel their financial situation has significantly worsened since doing so. Furthermore, over a third (35%)2 of retirees feel they’re often hit with unexpected costs like home maintenance, car repairs, or helping their children or grandchildren, meaning they frequently find themselves financially vulnerable.

LV= is encouraging people to start planning and seeking the necessary advice earlier so that they can make the transition into retirement with greater confidence. A robust advice process will include encouraging anyone considering their retirement financial planning to compare their current monthly outgoings with their expected outgoings in retirement. This will give a clear indication of the level of income required.

Peter Abbotts, one of the retirees highlighted in the report said: “I think I was one of the early people who employed an independent financial adviser and I’m reaping the benefits of that right now. Retirement for me meant an opportunity to enact a third period in my life and make that as fulfilling as I possibly could.”

Steve Lewis, LV= Retirement Director, said: “It’s widely reported that over 55s are experiencing a golden age when it comes to their finances. Entering retirement should be an exciting time, but our research shows this doesn’t automatically mean this group is confident about their retirement plans –both from financially and emotionally.

“While, on the one hand, ‘pension freedoms’ offer people more flexibility and choice, on the other, it demands they take greater responsibility on them of their own financial affairs.

To help, there are a range of options available from guidance to more personal tailored advice, where a financial adviser can help people be better prepared, financially and emotionally, for their retirement.

“It can also help for people to think about where their different pension pots are and if they would be better off bringing them all together in one place. This can ensure they enter retirement with confidence and control over their savings, and greater choice about how to take an income that will provide everything they hope for from retirement.”

To view the three retirement stories, visit the LV= website. To find out more about the protection and retirement solutions LV= offers, visit LV.com/adviser. The full Income Roulette report will also be available at www.LV.com/income-roulette.


Notes

1 ONS March 2018, ‘How do the post-World War baby boom generations compare?’

2 Methodology for consumer survey: YouGov, on behalf of LV=, conducted online interviews with 8,529 UK adults between 20th and 26th June 2018. Data has been weighted to reflect a nationally representative audience.

FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK