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We’re often sold the retirement dream – the world as your oyster, the permanent holiday. But our research has revealed that a growing number of people, rather than looking forward to retirement, are experiencing feelings of anxiety at the prospect - fuelled by both emotional and financial concerns. We look at the drivers behind these concerns and what practical things you can do to help overcome retirement anxiety.

Retirement anxiety is a growing trend

Retirement anxiety is an emotion of concern or worry, experienced by people yet to retire, about the prospect of retirement. Examples include concerns about how they’ll fill their time, financial worries and feeling a loss of identity. And as our recent research has highlighted, it’s a significant and growing issue.

More than half of UK adults aged 40 years+ who we spoke to are anxious about retiring, with both emotional and financial drivers cited. And almost one in five say they’re planning to delay retirement due to anxiety.

  • 58% attribute their anxiety to not having saved enough money throughout their lifetime.
  • 57% blame the cost-of-living crisis for their anxiety.
  • 45% cite worries about the current economy, and its impact on investments and pensions.
  • 20% are worried about being pigeonholed as old.
  • 17% are concerned about losing their identity when they stop work.

Planning for retirement is now regarded as a ‘stressful life event’, ranked more stressful than divorce by the 40-44 age group.

Indeed, our research has also revealed that almost one in 10 have sought medical help for their retirement worries, while 16% said that feeling anxious about retirement has kept them up at night. In addition, 13% say that their personal life and relationships have been impacted, while 14% say that it’s affected their work.

Another factor in the increase in retirement anxiety is people’s concern about their lack of planning. Over a fifth say they’re embarrassed about their lack of planning, and 15% are nervous about getting advice.

What the experts say

Dr Linda Papadopoulos, a leading psychologist, urges people to open up about retirement anxiety and face it head on:

“The key to conquering any stressor is to address the issue by first acknowledging it, and then seeking constructive and informed support to deal with it. Retiring is one of those big steps we know we’ll take at some point in our lives and we can reduce the risk of ‘retirement anxiety’ by starting to prepare as early as possible."

Meanwhile, Colin Dyer, our financial planning expert, highlights the benefits of planning and getting professional help:

“It’s clear that this growth in retirement anxiety is being fuelled by the cost-of-living crisis and worries about the economic landscape. We are seeing more and more of this every day with our clients. Planning for retirement early can help alleviate worries and anxiety, and people shouldn’t be embarrassed to raise issues they are not sure or are concerned about – it’s ok not to know. There can be significant benefits to seeking advice from a professional adviser in order to get a clearer understanding of income and savings, and how to best prepare for this important life stage.”

Practical steps you can take to help overcome retirement anxiety

1. Understand how much money you have and what you’ll need

Many people think of their pension and the state pension as their only sources of retirement income. But don’t forget about ISAs, other savings and investments, or rental income from any property you let out. You may have more than you think.

Our free retirement calculator helps you see the income you could get from all your savings and income sources, including the state pension. It also compares the income you could get with the level of income you’re aiming for, and gives you tips on making your retirement work for you.

2. Think about continuing to work in some capacity

If you don’t feel financially or emotionally ready to retire, have you thought about flexi-retirement? This basically means continuing to work in some form, while taking an income from pensions, savings or the state pension to make up your total income. And it’s a trend that’s growing in popularity. 66% of retirees we spoke to as part of our Class of 2022 retirement report said they planned to do some form of work in retirement.

For example, you could stay with your current company and reduce your hours, you could get a new part-time job, or you could even start your own business.

Find out more about flexi-retirement here.

3. Take advantage of help and support

Don’t feel that you’re alone – there’s a lot of great free information and support available that may help to alleviate some of your concerns.

If you’re concerned about the impact of falling pension and investment values, and the rising cost of living, on your retirement plans, have a look at our article Could market volatility and inflation mean you have to delay retirement?

If it’s the emotional side of retirement that’s most concerning you, our guide, The move to retirement – are you ready for it?, covers the four stages most retirees will go through on their retirement journey. Plus hints and tips to help you navigate these, as well as the lowdown from recent retirees on their experiences.

The MoneyHelper website is a free and impartial source of guidance on pensions and retirement, including phone and online support from their team of pension experts.

4. Think about getting professional financial advice

Getting financial advice can help you go into retirement feeling prepared and confident you’re making the right decisions. A financial adviser can help you work out what you want out of retirement and how you can make that a reality.

We offer an initial free phone consultation with a financial planner so you can find out if our retirement advice service is right for you. Find out more here.

 

The information in this article should not be regarded as financial advice. Information is based on our understanding in August 2022.