Retirement will probably be one of the biggest events you ever go through in your life, so it’s not something you’ll leave to chance. But knowing how much you’ll need, and how to get there, isn’t always easy.
Just four in ten (43%) working 50-65-year olds who expect to retire know how much annual income they’ll receive from their pension and savings, according to new research. During times of economic uncertainty, the importance of seeking expert support about major financial decisions only increases.
The YouGov survey, which questioned 1,935 people aged between 50-65 who expect to retire, also found that women are less likely to know about their post-work income than men (39% vs 46%). The findings come despite the Financial Conduct Authority (FCA) introducing measures to help people make the most of their pension savings earlier this year. The move followed the regulator’s conclusion that those approaching retirement, acting without guidance or advice, were struggling to make informed decisions.
Geographically, the results show significant disparity, with only a third of Londoners (34%) knowing how much they’ll receive post-retirement compared to more than half of those in the East of England (52%). Additionally, there is a notable drop in awareness amongst those who are divorced or separated (37%), or never married (34%), compared to those who are married or in a civil partnership (46%).
Backing up the FCA’s estimate that 100,000 people enter drawdown every year without taking financial advice, the study also found that the majority (53%) consider themselves ‘knowledgeable’ about their retirement options.
More men consider themselves knowledgeable (57%) than women (48%). Across the UK, those in the East of England (60%) are the most confident in their knowledge of retirement options, those in Yorkshire and Humber the least (49%).
These findings highlight that not enough people are taking professional financial advice in those crucial few years before retirement. The decisions made at retirement are big ones and have long-term consequences.
Many people spend years accumulating a large amount of money in pensions and other savings, but really don’t know what that might mean, how much income they can reasonably expect to receive and how best to take that income.
Understanding the savings you have, and the options you have with those savings is key. Taking advice can help to give you peace of mind that the choices you make when accessing your savings are right for you. To find out more, please contact us.
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