With people living longer than ever before, we all need to save more for retirement. There is always something more urgent to pay or save for though, therefore it is something that many of us rarely think about.
According to new research1, almost three quarters of people aged 45 or over are looking forward to the day when their life is no longer confined by their working routine. Despite an eagerness to retire, the research shows that almost half of over-45s with a pension have no idea how much it is currently worth with more women than men not knowing the value of their pension savings. A fifth of those aged 45 or over do not have a pension in place yet.
Two-thirds of those aged 45 or over are hoping for a shift in lifestyle, keen to retire early before their State Pension is paid. But only one in ten of them has proactively increased their pension funding to meet their retirement objectives.
Once people reach the minimum retirement age of 55 (age 57 from 2028), they can benefit from pension freedoms which allow withdrawals of money from their pension savings when required. Professional advice should be taken at that time to ensure it is dealt with in the most tax-efficient way. This is a time when some key decisions can be made, and the importance of knowing the value of your pension provision is very important. Taking those people aged 55 to 64, nearly half still have their eyes shut and do not know what their pension savings are worth.
Our lifestyles in retirement are changing, and life after work in the future will not look the same as it did for our parents or grandparents. While many of us might dream of what we are going to do when we retire, and when that might be, without a plan in place these dreams are unlikely to be fulfilled.
Once you retire, it is more important to have sufficient savings built up than it was when you were still working. I would urge everyone to take time to really understand how they are progressing towards their life goals and make plans for building up sufficient savings to be sustainable for life while they are best placed to make a real difference. Almost all employers now have workplace pensions which include an employer contribution, so this is a good place to start.
1 The research was carried out online for Standard Life by Opinuium. Sample size was 2001 adults. The figures have been weighted and are representative of all GB adults (aged 18+).
Fieldwork was undertaken in November 2017.