Nearly a quarter (23 per cent) of people “haven’t thought about” how they’ll survive, financially, when they retire, according to a survey by Capita Employee Benefits. Responses were highest amongst the young, with 35 per cent of those aged 25 to 34 giving that answer, but nearly one in six (13 per cent) of 45-54 year olds and 5 per cent of those aged 55 to 64 gave the same answer.
In spite of the demographic time bomb, with OECD figures suggesting that the number of people working and paying tax per retiree, will fall from nearly 3 now to less than 2 in the next 15 years, half of all those questioned across all age groups said they plan to live wholly or mostly off their state pension. A further 16 per cent (19 per cent of women and 14 per cent of men) planned to live off their partners’ state pension.
More than 3000 people were questioned for the survey which looked at the retirement plans of British adults in employment. But the results showed a clear disparity between the sort if retirement people expect and the one they’re building.
The most popular planned retirement age was 61-65 across all age groups (35 per cent), despite the state pension age now being 67 for most age cohorts. Nearly a quarter (24 per cent) planned to retire closer to state retirement age – 66-70, and an ambitious 23 per cent are hoping to retire by 60. Around a third (36 per cent) of those questioned think they’ll need at least £1,500 a month to retire on and more than a quarter (26 per cent) think they’ll need more than £2,000. But with the - improved – state pension currently bringing in around £600 a month, many people have a long way to go.
David Tildsley, director, at Capita Employee Benefits, said: “There seems to be a considerable gap between how and when people expect to retire and the ways they are making provision to do so. Too many are still relying wholly or predominantly on the state pension, or a spouses’ state pension, in spite of the fact that demographics suggest that thus may well be unsustainable by the time many retire. Even more shockingly many, including one in five of those aged 45 or older, are refusing to even think about it. Auto enrolment is, clearly, going to help but maybe its biggest legacy will be the transforming act of getting everyone to actually think about how they’ll fund their retirement.”
Other ways people say they’ll fund their retirement include selling their home (11 per cent), moving somewhere cheaper either in the UK or overseas (11 per cent), inheritance (8 per cent), and part time work (7 per cent).
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