Two in five fear they won't have enough money to last through retirement13 September 2021
- 37% of 2021 retirees say they don’t think they have enough money to last their full retirement
- 48% say they will have to cut back and reduce spending, while 21% plan to downsize their homes
- Only 39% who will retire this year have sought any professional financial advice for retirement
Two in five (37%) people retiring this year are worried they won’t have enough money to last through retirement, according to research by abrdn.
Overall, just two in five (39%) of those planning to retire this year feel very confident that they are financially ready. Within this, women feel less financially ready to retire than men, with just a third (34%) feeling very confident, compared with more than two in five men (43%).
Of the soon-to-be retirees surveyed for abrdn’s Class of 2021 report, nearly half (48%) said they plan to reduce their spending habits to support themselves in retirement, while nearly one in three (27%) expect to continue to work part time and a fifth (21%) plan to sell their property or downsize.
The research by abrdn found that just two fifths (39%) of those set to retire this year said that they had sought financial advice specifically for their retirement, while others have researched options online (55%), asked friends and family for advice (30%) and received support and information from their employer (23%) to prepare for retirement.
Ben Hampton, Retirement Advice Specialist at abrdn, said: “With retirement potentially lasting 30 years or more, it’s vital that people are fully aware of how they’re going to make their money last.
“After the last few years, we think initiatives like Pensions Awareness Week are more important than ever for people to get back on track with retirement plans after so much upheaval in other parts of their lives.
“Being aware of how much you will need to meet your retirement goals, how much you can afford to spend – and how this could change as the years go on, as well as considering how to piece together different types of income options can be daunting. This is why preparation is key.
“The government’s health and social care levy announcement adds a new element to the retirement planning puzzle. If you decide to work part time through retirement, especially after state pension age, you’ve got a new dynamic in the mix. Speaking to an expert will help you plan so you can take full advantage of the options available to you.
Despite concerns about their financial preparedness, abrdn’s research found that most (96%) of the Class of 2021 are emotionally ready to retire with this year’s retirees looking forward to the freedom to have their own schedule (76%), not having to work (56%) and spending more time with their friends and family (55%).
Yet while more than eight in ten (85%) are ready for the change in lifestyle from their current working schedule, nearly one in five (17%) say not having a routine does worry them.
Ben continued: “Emotional preparedness is a vital factor to think about when it comes to retirement, and plays a huge part in the financial considerations. When you feel ready to retire, and know what you want your retirement to be, it undoubtedly influences what the financial profile of your retirement will look like.
“The big lifestyle changes that retirement transition brings can be unsettling, and particularly so if you don’t have a plan in place. A well-developed retirement strategy will help give you the confidence that everything is in place to help deliver the retirement that you want.”
abrdn offers a financial and retirement advice service. You can get started with a free call to an expert to find out how advice could help you and your investments. You can receive a free retirement income report, free retirement planning support and get financial advice for your retirement. To find out more please visit here.
For further information, contact:
T: 0131 460 7922
Consumer research of 2,000 UK adults who were either due to retire in the next 12 months, or had retired in the past 12 months.
Research was carried out by Censuswide in February 2021.
Notes to Editors
At abrdn, we empower our clients to plan, save and invest for their futures.
We structure our business into three areas – and together they reflect our focus on enabling our clients to be better investors:
Investments: We work with clients to create solutions across markets, asset classes and investment strategies – combining our global network of investment professionals with research, data and technology.
Adviser: We offer market-leading platform technology and tools that enable UK wealth managers and financial advisers to look after the diverse needs of their clients.
Personal: We help people throughout the UK plan for their financial futures – through our financial planning business and our digital investing services.
Through the expertise, insight and innovation of our team, we aim to help clients create more ways for money to make an impact. We set our sights on giving them more confidence to achieve their goals, and more clarity about what they need next. And we focus on delivering outcomes that are more than just financial – by investing sustainably to build a better world.
We’re a global business. We manage and administer £532 billion of assets for our clients, and we have over 1 million shareholders. (Figures as at 30 June 2021)
In July 2021 we changed our plc name from Standard Life Aberdeen to abrdn, and all of the client-facing brands we use globally will be switching to our new abrdn brand identity. Over the coming months this will include Aberdeen Standard Investments, Aberdeen Standard Capital, and the Standard Life Wrap and Elevate platforms. In the UK, our digital direct-to-consumer services and our financial planning business switched to the abrdn brand in August 2021.
The value of investments and the income from them can go down as well as up and investors may get back less than the amount invested.