The majority of retired people have bleak expectations about their retirement, a new report states...
Most pensioners expect their pension to fall in value
Around 80% of pensioners say that they expect their retirement income to be eaten away by inflation.
The majority of retired people have bleak expectations about their retirement, a new report states.
Pensioners are well aware they face potential income problems in the future – but they haven't done anything about alleviating these concerns, according to the Cost of Living in Retirement report prepared for AXA Wealth.
The report says pensioners need between £175 and £300 a week to live comfortably – which is defined as being able to pay bills, eat well, run a car and have spare cash left over. This is more than the current state pension level.
One of the reasons why so many Brits say they know their retirement income will shrink, but can do little about it is because they retire earlier than they expected, leaving them less time for planning.
Of those surveyed, 69% had retired sooner than they expected due to ill health, redundancy or being offered early retirement.
If early retirement is not the person's choice, then they are less likely to be financially prepared: 58% of the 200 surveyed said they had not taken financial advice before retiring. And nearly half (45%) hadn't even worked out how much they could expect in pensions.
More cash needed
As a result of poor planning, 40% of pensioners said they need more money to have a more comfortable retirement and a third said they feel anxious about money. Of those needing more money, 60% said they wanted an extra £75 a week to make their retirement more enjoyable.
Simon Smallcombe, head of guaranteed distribution for AXA UK, said: "It's very concerning that despite people knowing their purchasing power will reduce, they aren't doing anything about it.
"Retirement is supposed to give you the freedom and opportunity to pursue leisurely interests, so to see food and heating bills presenting a problem is a worrying situation for today's baby-boomers."
A state pension on its own is insufficient to support a comfortable standard of living, which is why people are encouraged to start saving as early as possible in occupational schemes and other options available to them.
- You can apply for a state pension forecast through direct.gov.uk
- If you are in an occupational pension scheme you'll get an annual statement giving details of what pension you can expect
- Protect your income against inflation by using your pension pot to buy an index-linked annuity
The state pension is currently £107.45 for a single person