Around half of UK adults surveyed admit they use or plan to use the basic state pension to fund post-retirement leisure activities.
Whether it’s going on a round the world cruise, lazing on an exotic beach or visiting the Northern Lights, nearly half (48 per cent) of UK adults rely or plan to rely on the basic state pension of up to £110.15* per week to fund their post-retirement leisure activities according to new research from Nationwide Building Society.
Gender and age split
More than a half (53 per cent) of men rely or plan to rely on their basic state pension compared to 44 per cent of women. Reliance on the basic state pension also generally appears to increase with age. Whereas only 39 per cent of those aged between 25 and 34 plan to use the basic state pension to fund post-retirement leisure activities, this rises to 58 per cent of people aged over 55.
Other source of funds
While the state pension is still seen as the primary source for post-retirement leisure activities, those polled state they also use or plan to use other forms of finance such as:
¦money in a current account or savings account, including ISAs (44 per cent of UK adults);
¦the cash lump sum claimed from a private pension (31 per cent);
¦an annuity (26 per cent);
¦money from property, such as rent from properties or downsizing (17 per cent)
¦inheritance from other people, such as family and friends (15 per cent)
In addition, more than one in five (22 per cent) of UK adults plan to continue working part-time during retirement in order to fund any leisure activities.
Popular retirement activities
The study reveals that seeing the Northern Lights is one of the most popular aspirations with more than two in five (45 per cent) UK adults not yet retired admitting they would like to visit Northern Norway.
A seven-night Northern Lights break to Lapland costs around £1,000 per person half board, including many activities such as a snowmobile ride and a husky safari. If this trip was to be funded purely from the basic state pension, it would require someone to save up their entire state pension for a minimum of nine weeks.
While travelling and studying/learning a new skill are often the thing to do in retirement, our survey also revealed some less common activities that people would like to do. These include getting a tattoo, restoring a car, praying more, gardening and continuing to work.
Forward planning
People’s reliance on the state pension in retirement could in part be down to a lack of financial planning earlier in life. Our survey highlights that more than a quarter of all UK adults (28 per cent) who say they plan to retire have not started planning for it yet.
When it comes to planning financially for retirement, women are less prudent than men. Nearly a third (31 per cent) of women planning to retire admit they have not yet started putting money aside to finance their retirement compared to nearly a quarter (24 per cent) of men.While it is not surprising that nearly two thirds (64 per cent) of 18 to 24 year olds have yet to start thinking about their retirement plans, astonishingly nearly one in four UK adults aged between 45 and 54 (24 per cent) have yet to start making any financial provision for their retirement years.
Rob Angus, Nationwide’s head of protection & investments, comments: “Our research suggests a misguided view that the basic state pension will be sufficient to fund life in retirement. If that is their only source of income, retired people are unlikely to have enough to achieve the lifestyle that they hope for.
“One in five people also admit they plan to continue working during retirement. However, as most people are unlikely to work forever, they cannot generate income for themselves forever.
“This is why planning and saving for retirement is vital. In fact, it is one of the most important financial steps people will ever make, which is why it is concerning that around one quarter of UK adults have not started planning for retirement. It is certainly something that can never be started too early. The longer it is left, the more disastrous the outcome for people’s finances and the tougher those older years are likely to become.”
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