Nearly half of wages spent a week after hitting bank accounts
Household finances tend to be structured around pay day, with workers spending nearly half (42%) of their wages in the first week of receiving them.
A third of workers said they feel relief, happiness and secure when their wages hit their bank accounts.
And it’s no surprise as one in five said they have between only £1 and £100 left on the day before pay day.
According to the research from Standard Life, seven in 10 people in employment worry about not receiving a regular pay cheque once they retire, while 13% said they are extremely worried about the prospect.
At the same time, nine in 10 said continuing to receive a regular income payment in retirement would give them peace of mind knowing they have money to cover essential expenses.
For 67% of the 2,000 polled, they said in an ideal world, they would continue receiving a regular payday income in retirement.
The findings come as Standard Life launches a ‘Pay Day’ campaign on the last Thursday and Friday of each month to highlight how a pension annuity can help people secure a ‘pay day feeling’ in retirement.
Pension annuities provide a regular income in retirement
Claire Altman, managing director for individual retirement at Standard Life, said: “Knowing how and when you’re going to be paid naturally brings with it a sense of relief. It is not surprising that the thought of losing this regular income at retirement is a worry for many.
“Beyond the state pension, many people’s incomes are more variable, particularly since pension freedoms came into effect, with the majority of people using drawdown to access their pension savings. The gradual decline of defined benefit pension income has exacerbated this with a shift of responsibility (and the financial decision-making that comes with it) to individuals to manage their money.”
Altman added that one option to guarantee that ‘pay day feeling’ is for people to use some or all of their savings to buy an annuity, which lands in bank accounts each month like a salary, but with the added bonus that you “don’t have to work for it in retirement”.
She said: “An annuity can provide certainty and security, knowing you’ll have a regular, guaranteed income that lasts as long as you do. In a world of uncertainty, this kind of security cannot be underestimated, so it is worth thinking about annuities as part of your retirement income planning, particularly to help cover any essential costs.”