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The changing attitudes of retirement

The changing attitudes of retirement

Category: Retirement

Updated: 10/03/2014
First Published: 10/03/2014

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 It is now over 6 months old so the content may be out of date.

The general attitude surrounding retirement for many years seems to have been that if you work hard during your earlier life, then by the time you reach a certain age, you will be able to stop working and enjoy a life of leisure as a "senior citizen."

However, retirement is a fairly recent stage in life, being introduced during the 19th and 20th centuries, as it became possible through economic prosperity but also necessary due to physically demanding work.

It seems attitudes towards retirement could be changing again as people adapt, whether happily or by necessity, to a much later winding down age. With lifespans vastly increasing and economic pressures mounting, combined with a lot of the work carried out these days being much less physically rigorous, it seems that retirement as we have known it will be no more.

In a global study by Nielson it seems that over a fifth (19%) of British workers expect to be working until they are at least 70 years old, while 44% expect to retire after they reach the age of 65 – this is twice as many as the global average.

For some people this may come naturally, as there are some definite advantages for pensioners working, possibly part-time, into later life. Some of the social and mental problems associated with getting older, such as isolation and depression, could be alleviated this way, as pensioners don't feel so cut off from society when they retire.

However, there will also be those that are looking forward to having all that extra time on their hands and it seems that 46% of British workers say their expected retirement age is later than they would have liked it to be.

Views on retirement and what it means to you is obviously a very individual issue, but something everyone will have in common is the need for financial security. Whether the aim is to have large pension that you hope to be entirely dependent on in later life, or perhaps your aspirations are a little more modest and you just hope for a little extra to make things more comfortable, either way you need to be planning your retirement and putting something away for later life.

This is even more important considering that the largest proportion (35%) of those questioned say they plan to use personal savings as their main source of income. Many people like the flexibility of ISAs as a form of pension saving, enjoying certain tax breaks whilst still having the opportunity to get hold of the money if needed. If you are thinking of this kind of saving, you need to be strict with yourself, ensuring you regularly put an amount away, and that you don't dip into your savings for anything other than an absolute emergency.

Planning to retire on a company pension is the expectation of a further 29% of UK consumers, while 25% are planning to rely on a state pension; half the European figure of 49%.

Having enough money to live comfortably is the biggest concern about getting old for 54% of those questioned, coming straight after health and care needs.

Happily, 52% of British workers believe they will be financially more prepared for retirement than their parents, although this is lower than the global average of 70%.

Eleni Nichols of Nielson said: "Britons have a bleaker retirement outlook than people globally; they're almost twice as likely to expect to be working after 65, and a third less likely to believe they'll be financially better off than their parents.

"Britons are half as likely to rely on the state for their main source of income during retirement. This highlights a strong opportunity for financial providers to offer products that help people in the UK build their retirement funds early on."

Planning early is the key to a financially healthy retirement. You need to do your calculations now and decide which method of saving suits your individual needs.

What Next?

Take a look at the Moneyfacts retirement guides for some further help, and check out annuities to get an idea of what your pension pot could do for you.

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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