Very few people aged 55 and over are fully prepared for the financial implications of retirement, study suggests

News - Savings

Written by Ray Clancy

Thursday, 19 August 2010 10:31

Less than 5% of people in the UK approaching retirement are fully prepared for the financial implications, new research shows.

There has been a fall in the number of people aged 55 and older who are fully prepared for retirement and 1.2 million people aged 55 and older who are not at all ready, according to the latest retirement report from MGM Advantage.

The report shows that just 5% , some 299,000 of non retired British adults aged 55 and over feel fully prepared for retirement, a dramatic drop from before the recession when, in 2008, 39% felt fully prepared for the financial implications of retirement.

The retirement income specialist’s annual survey also reveals that 1.2 million British adults, some 21%, who are 55 and older and still working do not feel at all prepared for retirement.

Overall almost half, 46%, of all adults say that they are not at all prepared for retirement. Half of women, 50%, who have yet to retire do not feel at all prepared for retirement compared to 42% of men.

Just seven million people, 15%, have sought financial advice from a professional, while 8% have consulted their bank. It also found that 6% or 2.7 million non-retired people have sought retirement advice from their friends. When people were asked this question last year, 3% or 1.5 million people sought advice from their friends.

The report reveals that not only are people unprepared for retirement but that many are expecting to work for longer to make ends meet. Over a third, 35%, of people aged 65 and over still working expect to keep working until they are at least 71 years old and 9% of this age group plan to be working past their 80th birthday.

‘It is hugely worrying that so many people nearing retirement are unprepared for the financial implications of this stage of their lives. Part of the problem is that relatively few people seek professional advice before they retire but it’s crucial that people are extremely proactive in checking their finances at this time. This lack of financial planning means that more people will have to work longer to ensure that they have an adequate income in retirement,’ said Craig Fazzini-Jones, director at MGM Advantage.

Echoing the fact that so few people are properly prepared financially for retirement, only around a third of adults, 31%, or equivalent to 14.5 million people, have built up a savings pot. This increases to 39% for those between 55 and 64 and 42% for those aged 65 and over.