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Half of over 55s feel unprepared for retirement

Joanna Faith
Written By:
Joanna Faith

Nearly half of UK workers aged 55 and over do not feel prepared for their retirement and 45 per cent admit that funding retirement is one of their top three money worries, new research reveals.

Across all age groups, a third of people worry about funding later life, however, this figure drops to just 19 per cent among millennials, according to the study of 5,000 employees from companies with a workforce of 200 or more by Close Brothers.

Women struggle more than their male counterparts, with around three quarters of women (74 per cent) saying they don’t feel prepared for retirement compared to just half (54 per cent) of men.

To make matters worse, 41 per cent of women feel unconfident they will be able to retire at the age they want to, versus 23 per cent of men.

Around a third (32 per cent) of workers over 55 think they will need to work in retirement to supplement their income compared to one in five (20 per cent) millennials.

Worryingly, many workers approaching retirement have made no preparations for retirement. More than half (55 per cent) don’t have a financial plan to achieve their future goals and a third have never checked the size of their pension pot.

Jeanette Makings, head of financial education at Close Brothers, said: “With pension freedoms and reduced lifetime and annual allowances, pensions are no longer the only solution to save for a secure retirement, but they are still the bedrock and most significant option for most employees.

“It’s imperative that employees understand their pension and the importance of saving for retirement throughout their life not just when approaching retirement.”

Professor Sir Cary Cooper, a leading expert in workplace wellbeing, at the University of Manchester, who helped develop the Close Brothers Financial Wellbeing Index, said: “The report has produced astonishing findings, and it is absolutely necessary for employees to start planning for their retirement early.

“Reviewing how much you are saving into your pension a few times a year can go a long way. When you keep track and know how much you are putting away, you can make necessary changes where needed and feel more relaxed and confident about approaching retirement.

“Going forward, we all need to think about the ageing population in the UK. We are living longer and must consider the extra money that will be required to fund a longer retirement, as well as the additional costs of social care. We must think ahead and engage with our retirement plans now, to worry less later and enjoy a comfortable retirement.”