Only half (53%) of Britain’s over-50s feel well prepared for retirement, according to joint research by the London Institute of Banking & Finance and Seven Investment Management (7IM).
The firms surveyed 2,000 UK adults aged over 50, with assets of more than £50,000 ($64,000, €56,500) including property and pensions.
The research also found that four out of ten (38%) worry about retirement, but it would take a windfall of more than half-a-million pounds before most would call in a financial adviser.
Michael Martin, Private Client Manager, 7IM, said: “This is the first generation that’s really having to confront the double whammy of longevity and diminished pension returns and for some it’s proving painful. They started out their careers dreaming of packing in at around 60. Many now face going till they’re 70, and often longer.
“There are a number of steps savers should consider to address this problem and one of them is taking a sensible amount of investment risk.
“Good advice can make a big difference in helping you work out what ‘sensible’ means in your circumstances and where best to invest to generate the returns you need. They can also give you a proper plan – so you don’t reach retirement age with only debts and regrets.”
Advice shunned
Of those shunning professional advice, nearly half (47%) think they can look after their own money and around 28% say they don’t have enough to justify an adviser. A similar amount (28%) of respondents think the costs are too high.
One in five (19%) say it doesn’t matter how much they inherit, they would never consider getting financial advice.
Women are more reluctant than men to consult an IFA – the advice tipping point for most men is £499,171, but for most women it is £544,249. Some 25% of women said they hold stocks and shares outside of an Isa or Sipp, compared with 40% of men.
Saver regrets
The survey also found nearly half (48%) who are yet to retire say they need to save more for retirement.
Asked what they would do differently if they had their time again:
- 60% of over 50s would start investing earlier;
- 58% would save for retirement earlier;
- 33% would get on the property ladder sooner; and
- 30% say they’d spend less.
With regard to children, 18% wished they had had them earlier, while 8% wished they had given their children less (although 24% said they would have given their children more financial support). Only 11% said they would spend more on their children.
Work longer
Just over a third (34%) of pre-retirees said they would have to work longer than planned so they could afford to retire – on average more than seven years longer than they expected when they set out on their careers.
Peter Hahn, dean at The London Institute of Banking & Finance, said: “Statistically a 50-year old Briton is expected to live to age 81, so most will have to fund a minimum of 14 years in retirement.
“That means having a long-term investment strategy with less inflation-exposed cash – a balance many may not be confident about.
“So, while over-50s say they feel well prepared, these findings suggest a poor understanding of long-term risk and reward, risking poorer retirements.
“And you don’t need a £500,000 ‘windfall’ to make advice worthwhile. Advice can be helpful in all sorts of circumstances and with much smaller ‘pots’ of money and assets.”
