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Pension panic: Almost half of retirees need more money than they have saved

Rebecca Goodman
Written By:
Rebecca Goodman

The main goal for retirement is to feel financially secure yet 41% of pensioners say they need more money for a comfortable life post-work, according to a report.

The majority of those asked, 94%, said being financially secure from when they stop working is what they most want in retirement.

Yet the report from Legal and General shows a big gap between this goal and the reality of how much people are saving for retirement.

It showed that one in five people said they needed “significantly” more money when they stopped working than they originally planned. This figure was highest for those aged 50 to 59.

The average amount in a pension pot was £185,000 among those asked. One in five had saved up to £49,000 for their retirement and 16% retired with no pension. Just over one in 10 said they had £500,000 in their pension and 5% had saved between £700,000 and £899,000.

Confusion over pensions and retirement income is nothing new, and 75% of savers recently said they have no idea what the value of their pension pot is.

One in 10 also admitted not knowing how many pension pots they have.

The biggest cause of anxiety for those who are yet to retire, picked by 41% of those asked, was money worries. Yet over a third didn’t get any financial advice on their pension and just 26% spoke to a financial adviser.

After being financially secure, 90% of respondents said spending time with family was important to them in retirement while 81% said affording care and assistance was key to them and 73% said financing major life events, such as weddings, was important to them.

‘Plan ahead and you can do it’

Lorna Shah, managing director of Legal & General Retail Retirement, said: “There’s a lot you can do to help you live your ideal retirement when you finally get there. Start by imagining it! Sketch out your later life hopes and dreams. Then you can see if you’re saving enough and making the right pension pot choices to support them, and take action if you’re not.

“Of course, in our tough financial times that probably won’t be as easy as it sounds. But even if all that planning’s a bit stressful and confusing, our research shows that it will be well worth doing. Looking at your financial situation, setting later life goals and getting advice on the best way of achieving them are key steps toward a happy retirement.

“So whether you’re looking to spend more time with loved ones, travel the world or just keep up your current lifestyle, our advice is the same: Plan ahead and you can do it.”