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Financial worries loom for retirees

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Written by: Emma Lunn
09/10/2019
A giant study has blown a hole in the clichéd image of retirement – and found people worry about money.

Typical retirement images show tanned, silver-haired couples smiling from golf courses and cruise ships, but a survey of 10,000 Brits found many people approaching or in retirement have cash concerns.

Almost two-thirds of respondents to Interactive Investor’s Great British Retirement Survey disagreed that retirement was a time of pleasure – and highlighted financial problems instead.

The study found that more than half of retirees or people approaching retirement don’t know how much debt their partner has and that almost a third (31 per cent) don’t know how much their partner earns. A third (32 per cent) of those in a relationship only talk about money with their partner once a month.

The gender agenda

The study raised the need to address the ‘gender agenda’. Men are twice as likely to work into retirement for enjoyment (34 per cent versus 14 per cent) and women more likely to do so for the money (41 per cent versus 20 per cent). Meanwhile, retired women are more than twice as likely as men to say they are ‘just getting by’ financially.

More than a third (36 per cent) of non-retired women regret not saving enough, while 33 per cent have no idea what their income will be in retirement. As for men, 28 per cent of the non-retired regret not putting enough money away, with 19 per cent unsure of what their income will be in retirement.

In addition, 32 per cent of women believe the overriding meaning of retirement is uncertainty around their levels of wealth compared to 17 per cent of men.

Retirement positives

The study revealed some positive aspects to retirement too. Far from seeing it as a time to take the foot off the pedal, one in 10 consider retirement as an opportunity to get back into studying, while 29 per cent look at starting a new business or pursuing new hobbies.

Some 52 per cent of respondents said they will do voluntary work for their local community when they retire and 35 per cent of retirees said they do unpaid voluntary work. Others help out with childcare, with one in five (18 per cent) looking after grandchildren.

A further 20 per cent of respondents consider travel and holidays as their greatest retirement priority, followed by spending more time with family (15 per cent) and more exercise or sport (10 per cent).

Financial uncertainty

Fear of a stock market crisis are a big concern for those currently in retirement (42 per cent), ahead of running out of money (35 per cent), tax issues (24 per cent) and not been able to help younger family members with large expenses (24 per cent).

While running out of money is the most common concern among pre-retirees (26 per cent), only 3 per cent of respondents – both retired and non-retired, regret helping their children financially. Some 27 per cent of respondents with children say they have gifted money for house deposits, whilst 8 per cent have loaned the money.

Moira O’Neill, head of personal finance at interactive investor, said: “This survey presents a more nuanced picture of what retirement (and the run up to it), looks like in Britain. Holidays and travel, and having more time for friends, family, hobbies and voluntary work, are all top priorities for both men and women – but there are some big secrets too, with half of couples having no clue how much debt their partner has.

“It’s not just financial uncertainty, either – 70 per cent of retired respondents have no lasting Power of Attorney, which can wreck real havoc if unexpected health issues crop up. Many of our retirement priorities take significant planning and, overwhelmingly, this research finds that peace of mind, not running out of money, and having enough money to leave behind to children are all top objectives. In other words, many want to have their cake and eat it – but it is women in particular who are more likely to be left with just the crumbs.

“Overwhelmingly, this research puts real flesh on the bones of the gender pension gap and it is concerning. The inescapable truth is that many women are facing a retirement of financial hardship which is having a real and lasting impact on their quality of life.”

 

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