Brits seek retirement advice 10 years too late – research
The average age at which people first seek retirement advice is 35 years old, yet advisers say that they can provide the most long-term value for people at the beginning of their working lives.
Even more worryingly, 38 per cent of people surveyed are not making any savings at all for their retirement.
The average amount that adults are saving towards their retirement each month is £97, but those who took professional financial advice are saving an additional £71 per month. Over the course of a working life, this equates to an extra £25,730 in the retirement pot of someone who took advice at age 35, even before interest and tax relief. However, an individual taking advice at the recommended age of 25 would have an additional £34,300.
People who have taken advice are also more realistic about the likely length of their retirement. They expect to have to fund a retirement lasting 37 years on average, whereas those who have not taken advice think they will be retired for just 22 years on average – a belief that may leave them dangerously under-funded.
Simon Massey, wealth management director at MetLife, said:“People need certainty about their income in retirement and the risk of running out of money and having to rely on the State Pension is one of the biggest fears for savers.
“That is why it is important that providers offer as much flexibility as possible in line with the new pension freedoms while also helping people to understand the risks of outlasting your pension fund. Savers need to be as well-informed as possible which is why advice is important too.”
Karen Barrett, chief executive of unbiased.co.uk, said: “At the age of 25, retirement is probably the last thing on your mind. But we in the UK could be massively better off if we all got used to the idea of planning for the end of our working life as soon as we begin it. Pension saving is cumulative by nature, so time is the single greatest asset on your side. If you start early, then even if you can save only small sums, compound interest over the years can make an astonishing difference.”