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Retirement dreams shelved for millions

Retirement dreams shelved for millions

Category: Retirement

Updated: 25/08/2011
First Published: 16/08/2011

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 It is now over 6 months old so the content may be out of date.

Millions of people are seeing their retirement dreams being left in tatters because of the rising cost of living and poor financial planning.

Research by MGM Advantage found that while the top priority for six out of ten adults (58%) is the freedom to live their life to the full or have financial security, the reality is often very different.

Almost four million retired people (37%) have scaled back on their daily expenditure with another half a million taking the decision to return to some form of employment or starting a new career in their retirement.

Of greater concern are the 265,000 retired people who have had to turn to the state for aid, and another 725,000 retirees who regularly rely upon credit.

Both of these are up significantly on last year's figures, with 119,000 people requesting financial assistance from relatives and 486,000 relying on credit in 2010.

The rate of inflation is having a stinging effect on retirees' money.

With the annual CPI inflation rate at 4.4%, figures show that UK households will collectively need to find an extra £40 billion (£39.753 billion) to maintain the standard of living enjoyed 12 months ago.

For households where the main occupant is aged 65 -74, the corresponding figure is £3.16 billion and where they are aged 75 and over, it is £2.47 billion.

"It's tragic that so many people's retirement dreams fail to come to fruition, often because consumers lack understanding about their options or are unaware of some simple, easy steps that they can take to boost their retirement income by shopping around for the best annuity rate," said Craig Fazzini-Jones, director at MGM Advantage.

"The pressures facing retirees have increased significantly over the last six months as the rising cost of living continues to erode their disposable income.

"So it is essential they make their pension fund work as hard as possible by making the best decision on how they turn their fund into a retirement income."

If you're nearing retirement, the new Moneyfacts Annuities Service offers all the help you could ever need to make the most of the pension funds you have built up.

Annuities from different providers can be compared, while people who smoke or have health issues can take advantage of an enhanced annuity.

The whole process can be completed online, but if you get stuck at any point or have a question that needs answering, an expert is ready and waiting to give you a call.

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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.