Its nationwide study found 38% of pensioners worry that their guaranteed retirement income is not sufficient for their needs underling the challenges for savers of balancing flexibility with guarantees.
The launch of pension freedoms has removed the need to guarantee any income in retirement but the research shows retirement savers increasingly recognise the need to have the majority of their retirement income guaranteed for life. MetLife is supporting moves to ensure savers understand the choices available to them and has launched a campaign to deliver Real Pension Freedom supported by advisers and focusing on the valuable role guarantees can play in retirement.
Around 75% of over-40s*** agree that having guaranteed income in retirement in addition to their State Pension is important. On average, savers want 60% of their retirement income to be guaranteed and more than a quarter (26%) say they want to have all their income guaranteed. This highlights the demand for newer solutions, such as guaranteed drawdown, which can provide flexibility as well as a guaranteed income for life.
MetLife’s study shows the average pensioner has around 68% of their retirement income including State Pension guaranteed for life. However, it warns that leaves millions at risk of having to cut back if the rest of their retirement income runs out.
Around half (49%) of pensioners questioned say some or all of their income comes from a workplace final salary scheme, the research found.
Simon Massey, Wealth Management Director at MetLife UK said: “The message from those who are already retired is that guaranteed income is absolutely vital in retirement planning.
“Millions of pensioners fear they don’t have enough guaranteed income and are worried about running out of money and the risk is that the problem is only going to get worse for savers who are coming to terms with the new pension freedoms.
“It is encouraging to see savers want to have an average 60% of their income in retirement guaranteed but they could face challenges in achieving that. People retiring now and in the future need to consider solutions such as guaranteed drawdown.
It combines the certainty of a guaranteed level of income for life with the flexibility to access your savings if you need to and provides the potential for investment growth.”
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