Almost a third of people have no retirement plans
Almost a third of people (30 per cent) in the UK have no plans for how they will fund their retirement years, according to research from Aegon’s ‘Second 50’ campaign.
People without retirement plans are four times more likely to feel stressed about their long-term finances (46 per cent), compared to those with well-developed plans for later life (11 per cent).
The research, which asked 1,000 UK adults in August, revealed that over half of those without plans are concerned about running out of money in retirement (57 per cent), more than double the proportion of people with a financial plan (22 per cent).
Kate Smith, head of pensions at Aegon, said: “With life expectancy having risen over the past decade, and economic challenges forcing us to think about our money more deeply, taking the time to prepare a clear plan for our retirement finances is becoming increasingly important.
“Not only could it help you to navigate the known and unknown costs of later life — but as our Second 50 research shows, it also has value in providing peace of mind and confidence, as well as reducing stress.
“We all deserve a retirement we can enjoy, whatever your financial reality. And having a plan doesn’t mean you have to follow strict rules every day or create a big, scary document.
“Simply understanding what you have, what you’ll likely need, what you’d like to do, and then coming back to review it every now and then can be just as effective.”
Tips for writing a financial plan
Smith outlined five tips for writing a financial plan:
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Know what you have
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Consider what you need
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Think about what makes you happy
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Write it all down
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Review your plan regularly
For most people, their state pension will probably be the foundation of retirement income, so she explained it is important to know when you can access it and what you will be entitled to.
She added: “It can be hard to envision exactly what you’ll need in retirement, but try to paint a picture of your future self and estimate how much money you’ll need to achieve it.
“This should include continuing everyday expenses like your bills and groceries, as well as new costs that come with age, such as the possibility of funding home improvements or social care.”
Smith explained that having a plan is about more than balancing your ins and outs; it’s about building a guide to funding a retirement that brings joy and purpose.
Research has proven that people who formalise their plans are significantly more likely to achieve their goals than those who don’t, so she urged writing the plan down.
She added: “You don’t have to update your plan with every purchase you make, but as your situation or priorities change over time, it can be incredibly valuable to review your plan at regular intervals and make any necessary adjustments that allow you to feel confident you’re still on the right path.”
sonia.rach@ft.com