UK pensioners expect fall in spending power
The providers’ report, Cost of Living in Retirement – which polled 200 pensioners – found British retirees know they will face falls in income but are under-prepared.
Simon Smallcombe, head of guaranteed distribution for AXA UK said: “It’s very concerning that despite people knowing their purchasing power will reduce, they aren’t doing anything about it.”
The report found many pensioners (69%) had not made sufficient plans to counter inflation as a result of early retirement due to ill-health or redundancy.
But half (58%) of respondents admitted to having not sought any financial advice prior to retirement. One in seven waited until just before they retired. And two-fifths (45%) said they have never calculated their pension benefits.
As a result, a third reported they are feeling anxious about money. Sixty per cent said they would need an additional £4,000 a year to feel comfortable.
Smallcombe said: “Retirement is supposed to give you the freedom and opportunity to pursue leisurely interests, so to see food and heating bills presenting a problem is a worrying situation for today’s baby-boomers.
“Retirement planning should be an on-going process that can adapt to changing circumstances using a combination of products; perhaps with guaranteed products forming a core income, supplemented by capped or flexible drawdown as well as income from other tax wrappers as required. Advice is not just something you seek a few months before your last day at work.”