The nationwide survey quizzed 1,000 45 to 55-year olds with either individual incomes of £35,000 or more a year or household income of at least £60,000, and who had some level of household savings, about their financial situation and plans. It found that although a third (30%) had clear goals in place for retirement and financial plans in place to achieve them, a similar number (29%) had not really thought about funding their later life and one in eight (13%) did not know how or when they would be able to stop working. In addition, while almost three quarters said they would rely on a workplace pension to fund retirement, one in five (22%) said they would rely on an expected inheritance to fund their retirement and a quarter (26%) expected that they or their partner would continue to work.
The survey also asked how long respondents would be able to last on their savings and investments if they lost their main source(s) of household income, with a third (32%) saying they would get into financial difficulty in three months or less. Even the relatively affluent worried about running out of money, with a fifth (20%) of those with disposable income of between £750 and £999 per month saying their savings and investments would last three months or less if they lost their main source(s) of income.
Sara Wilson, Head of Platform Proposition at Alliance Trust Savings, commented: “With much of the recent focus on younger generations and those in or at retirement, it can be easy to overlook the scale of the financial challenges facing people in their mid-life years. Those within 10 years of being able to access their pension savings are often faced with a raft of potentially complex challenges, from the cost of raising children and looking after ageing parents to dealing with divorce or the threat of redundancy. All while keeping household finances in shape and setting money aside for later in life.
“Putting plans in place, keeping a close eye on them and, ideally, seeking professional advice is therefore essential in enabling people to get the best out of their finances and take the stress out of the mid-life years.”
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