Brits over-reliant on property and inheritance for retirement
A study by Prudential revealed that 51% of financial advisers said consumers are relying too much on rises in house prices to create wealth, while 48% warn savers are relying on inheritance for retirement planning.
As such, advisers believe savers are unrealistic about the income they will need in retirement as 64% of those questioned said clients underestimate how much they will need with 54% underestimating how long they will live in retirement.
Two thirds (66%) said their biggest concern remains the risk of people running out of money.
Nearly two-thirds of advisers (62%) said that failing to understand the implications of drawing down funds during a stock market downturn is one of the biggest barriers to consumers achieving financial security in retirement.
Vince Smith-Hughes, retirement expert at Prudential, said: “Pension freedoms have highlighted the need for retirement planning and advisers welcome the impact of the reforms in encouraging many savers to take pensions more seriously.
“But the continuing reliance on house price inflation and inheritance highlights that there needs to be shift in attitudes, with savers still unrealistic about the income they will need in retirement and how long they will live.
“Consumers often do not understand how much they should draw from their pensions and how drawdown during a downturn can reduce the size of their funds. This underlines the role that advisers can provide by helping many retirees secure a retirement income that lasts for the rest of their lives.”