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Retirement reality a decade away from the dream

Paloma Kubiak
Written By:
Paloma Kubiak

The ideal age to retire is 61, but the harsh reality is that many Brits will only be able to stop working closer to the age of 70, research reveals.

The age at which over 50s want to retire is “out of kilter with reality”, according to research from Moneyfarm.

In fact, there’s an eight year retirement gap with the dream age of 61 overshadowed by the reality which means Brits only stop working at the age of 69.

This is also three years beyond the state pension age of 66.

However, 28% of the over 50s polled said they did not feel they would ever be in a strong enough financial position to fully retire.

Moneyfarm also revealed there’s a big discrepancy over the amount of money needed for the ideal retirement of £373,000. This is way off the £218,000 held by the average 50+ pot holder.

And when it comes to the sexes, there’s a large difference between what men and women hold in their pensions.

Men have acquired £260,000 in their pension pots, while women over the age of 50 have £149,000.

Nearly half unsure of comfortable retirement

The analysis showed that almost half (47%) of the respondents are unsure if they have enough funds to live a ‘comfortable retirement’.

Meanwhile, a quarter said they’re already certain they won’t have enough to be able to live the post-work life they desire.

More worryingly, 53% of those who are over 60 revealed they had no idea over what they would need in a post-work life, as they have not worked it out, meaning the ‘retirement gap’ could be wider.

For 5% of those polled, they said they had no pension in place.

Indeed, eight in ten said they have genuine concerns over being able to pay for retirement regardless of when they quit working.

Also a majority 85% said they would be retiring later compared to their parents.

As such, three quarters said they wished they began to start saving for retirement sooner.

The catalyst for many starting their pension journey was when they turned 30, but it wasn’t until the age of 41 that pension saving was taken seriously.

Family and travel the retirement dream

Spending time with family was the priority when it came to time in retirement, with 54% saying this is what they looked forward to the most.

Family time was followed by travelling the world where 37% wished to broaden their horizons.

Just under a quarter (24%) said that improving fitness was the most important thing, while a fifth said they wanted to learn new skills.

Lily Sparrow, senior investment consultant at Moneyfarm, said “You cannot start paying into your pension pot early enough.

“There is no such thing as too soon in order to avoid this ‘retirement gap’.

“Making small changes early on in your working life is a lot easier than making huge sacrifices later on down the line when life’s financial obligations and challenges are that much greater.”

Sparrow added that while just over half  of Brits claim they will fund their retirement through a mix of state, company and private pensions, 16% said they will mostly be reliant on the state pension, 4% on the sale of property and 3% on inheritance.