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A working retirement for many Britons

A working retirement for many Britons

Category: Retirement

Updated: 04/03/2014
First Published: 28/02/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It looks as if Britons are resigning themselves to having to work well into their retirement to make ends meet, according to two separate studies looking at people's confidence about their finances after retirement age.

Bestinvest found that 27% of those surveyed felt they will need to keep working part-time to supplement their pension after retirement, while in its own study Aviva found that 55% of UK consumers are worried about not having enough money to retire comfortably.

A quarter (25%) of those questioned by Bestinvest believed they would be financially comfortable in retirement, with the highest amount being in the South East at 32% and those with the least confidence coming from the East Midlands at 18%.

Consumers are constantly reminded how they need to be considering the best way to save for retirement and not relying solely on state handouts, however, 16% of respondents said they would be entirely, or largely, reliant on state benefits for their retirement income.

People were keener to be independent when it came to the question of relying on others, with only 3% believing they would rely significantly on family and friends.

Consumer's attitudes were definitely tuned towards being frugal with 15% saying they would need to be quite "tight-fisted" in retirement and feeling it wouldn't be much fun, while 8% felt they would be "ducking and diving" and doing whatever was necessary to keep their heads above water.

Sadly only 5% were looking forward to retirement, feeling they would have enough money to do what they want to do. This was low across all regions with London and Yorkshire/Humberside at 9%, compared to the East Midlands at just 1%.

Consumers are also clearly underestimating the amount they will need in retirement. They were asked how much they thought they would need in their pension pot to achieve the UK average salary of £26,500 – on average they guessed £335,00 when in fact the figure is £930,000.

Aviva's consumer confidence study only emphasised the need for people to be thinking about how they will save for retirement, with 18% saying they do not hold any form of savings or long-term investment product and only 16% planning to put more into pensions and retirement savings next year.

On a happier note, economic confidence is growing, however, people's confidence in their own household finances has some way to go to catch up. This is the first time in three years that consumer's confidence in the economy is higher that in their own finances, and this is reflected by the fact that 71% of UK consumers are cutting back on discretionary spending.

Tim Orton at Aviva said: "Since the financial crisis the pressures on UK household budgets have become stronger and have affected more families, leading them to cut back on savings, and it is understandable that some are unable to save.

"Our research reveals widespread concern about having an insufficient income in retirement and many seem resigned to working longer.

"We can take some comfort from the fact that, while UK confidence in the general economic outlook is still in the negative territory, it has reached its highest level since 2010. But this rising confidence is not mirrored in people's confidence in their own finances and it is vital people save for retirement and protect themselves from life's uncertainties."

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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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