Retirement finances remain a worry
People facing retirement are more concerned than ever about their financial security and income, according to LV=.
The report reveals deep concerns among the nation’s pre-retirement population about their overall financial situation and level of savings, and how their retirement years may be impacted.
One of the key findings is the rise of ‘FRED’ – 66% of the survey’s respondents say they are Facing Retirement Earnings Doubts, and in the last year have become increasingly worried about their financial security in retirement.
This ‘anxious majority’ equates to six and a half million people. People facing retirement believe increasing utility bills and food prices will be the biggest threat to their financial security after they retire. Of those who are concerned about the future, more than three-quarters highlight these spiralling costs as their biggest financial concern.
With the cost of gas, electricity and water having risen by an average of 52% since 2003, and at least six electricity and gas suppliers increasing prices during the first four months of 2008 alone, this is seen as a very real threat to retirement income.
The report also reveals that people approaching retirement are aware that there is a significant gap between the income they will need to maintain their standard of living in retirement, and what they will actually have. Those surveyed said that on average they would need £20,100 a year in retirement, but believed they would actually have an income of only £16,900 a year.
Mike Rogers, group chief executive of LV=, said: “The combined impact of the rising cost of living, fears of a recession, and widespread media coverage of the credit crunch, has created an anxious majority of people facing retirement who are very concerned about their financial future.
“Our advice to anyone approaching retirement is to seek professional financial advice to ensure you make the most of your finances when you retire. Young people shouldn’t ignore their own retirement needs, despite it being decades away. Saving just a little and often – as much as you can afford – is a step in the right direction.”