The old saying that life begins at 40 may be usurped by new findings which reveal that life could actually begin two decades later, as longer life expectancies and better income prospects combine to make retirement the new golden age – provided those incomes aren't stretched too much.
The research, from financial group Sanlam, found that nearly a third (29%) of those aged 60+ and recently retired have found themselves with more disposable income than they thought, with many putting their post-work funds to good use – 40% have taken up new hobbies, for example, while 39% are going on more holidays.
Others (12%) are giving back to local communities in some way, while 17% are volunteering to give them a sense of purpose, so pre-conceived ideas of retirement being financially fraught and lacking in purpose appear entirely unfounded.
However, there's one caveat to enjoying this new lease of life in retirement – having suitable finances. While 29% of retirees say they have more disposable income, the picture isn't quite as rosy for many others, with financial responsibilities still impacting the pension pots of many respondents.
For example, 33% of those surveyed said they had taken an annual income pay cut of 40% or more since retiring – enough to hit anyone's wallet – whilst one in five admitted that they needed to stick to a tight budget simply to make ends meet. Not only that, but a further 25% said they're still supporting their children financially, showing that the Bank of Mum and Dad is still open for business well into adult life.
"People are taking advantage of their freedom in retirement, which is giving them a new lease of life," said Nick Parry of Sanlam UK. "However, while that sounds positive, many still have costly financial commitments which are eating into their pension pots, and this could become an issue if that pot has dwindled in later retirement. These costs, coupled with the uncertainty in the market and annuity rates slumping, could see peoples' dream retirement de-railing."
Nick added that giving people access to their money via pension freedoms has been a positive development, but that this "makes it even more crucial that the next generation of retirees are given the relevant support, advice and guidance needed to ensure they can enjoy a comfortable retirement in the future".
This means that, if you're approaching retirement, make sure to seek the right kind of support. You want your pension pot to go as far as possible so you can live your retirement to the full, and you may want to start the process by contacting our no obligation annuity service to find out more.
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