Financial security top priority for over-55s
Money is more important than companionship, a happy family life and hobbies, according to a report from Aviva.
Aviva’s latest Real Retirement Report reveals that having sufficient means to live comfortably is the top priority for 27% of over-55s, rating more highly than sharing retirement with a partner (17%), having a happy family life (12%) or devoting tiem to hobbies and interests (3%).
Only good health is rated as more important than money (38%) in all age groups examined (55-64s; 65-74s and over 75s), regardless of income.
A shared retirement becomes more important with age and is the main priority for 23% of over-75s compared with 13% of 55-64s. More of the younger demographic prioritise finances than any other age group (32%) – suggesting the recession and savings squeeze has increased the importance of money for those currently approaching retirement.
With hindsight, the over-55s identify paying off their mortgage or buying their property outright as the best financial decision they have made: 60% have done this and 96% of those are glad they did.
Taking a break from work to raise their family is the second best decision made, with 95% of those who have done (36% of over-55s) pleased with their choice in retrospect. Similarly, 94% of those who took out a workplace pension are glad they did.
Investing in the stock market comes out as the most widely regretted choice. Nearly one in five over-55s have done (19%) – typically between the ages of 35 and 39 – and nearly a third of those regret it (29%).
On reflection, over-55s have a simple message about financial planning for retirement: save more on a monthly basis. Exactly half (50%) would give their younger self this advice, with 40% emphasising the importance of making better use of savings products such as Isas. Another common theme is the importance of contributing earlier to a pension: 39% would recommend starting a personal pension earlier than they did (only 13% opened one before they were 30) while 38% say the same about workplace pensions (only 35% started one by the same age).
Clive Bolton, managing director of Aviva’s At Retirement business, said:
“Some people may be tired of hearing about the importance of saving for retirement, but listening to those who know what it means to be retired in 2013 leaves little doubt that financial stability can in fact buy happiness, and certainly help towards a stress-free lifestyle.
“These findings suggest there is no magic recipe or secret formula that works better than regular saving and prudent decision making, whether that means taking steps towards paying off a mortgage or seizing opportunities to pay into pension schemes. The fact that over-55s are grateful for time spent raising their families shows that financial planning needn’t take over your life – but a bit of careful thought can be priceless in the long term.
“Clearly the pressure of living costs and economic difficulties mean some over-55s find themselves in a less than comfortable position and harbour regrets about the past as retirement looms. It is important to remember there is a range of financial choices open beyond the age of 55 that can work to steer their finances back on track and help deliver the stress-free retirement they aspire to.”