As our health, diet and living conditions improve, so too does our longevity. And while living longer is certainly no bad thing, it can put pension savings under pressure, especially in cases where forward planning may have been put to one side.
Thanks to our increasing lifespan, retirees may find themselves in a precarious position as their pension savings may not be sufficient to cover their whole retirement. According to research by Brewin Dolphin, a wealth management service provider, only 48% of 55-65 year-olds questioned in their survey thought their pot would last over 10 years, while a worrying 27% admitted that they had no idea how long their retirement savings would hold out for. Considering that the average life expectancy now stretches into the eighties for both men and women, this means that a significant number of people are at risk of their money running out before the end of their lives.
Matters are compounded by the finding that 26% of those questioned have already started to dip into their pots, leading a worried 6% of these to estimate that their savings will only last five to 10 years.
Despite being in this potentially precarious position, over half of those questioned (57%) confessed that they would be unlikely to seek financial advice on withdrawing a cash lump sum from their pension savings, which could cause problems in the future.
"Greater longevity comes with the added responsibility and challenge of ensuring that later life is fully financed," commented Nick Fitzgerald, head of financial planning at Brewin Dophin. "It's a worrying prospect that even wealthy pensioners could run out of money, making them reliant on the state later on in their retirement. The importance of taking financial advice and planning adequately cannot be emphasised enough."
If you are approaching retirement and want to ensure that your pension lasts for as long as you need it to, now is the time to take action. Getting appropriate financial advice is the best course – an adviser will be able to weigh up your savings and suggest strategies to try to insure you get the income you need for as long as you need it. If you are unsure who to turn to, it's a good idea to contact Pension Wise first. Pension Wise is a free Government service that can guide you to the right options for you. In addition, you can also take a look at our no-obligation annuity planner to see if this is a solution that could benefit you.
By planning ahead, you can hopefully then sit back and enjoy the peace of mind of knowing that your pension savings will last for the entirety of your retirement.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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