A new report from Standard Life Aberdeen has found that two thirds of people who will be retiring in 2021 don’t have enough money in their pension pots to sustain their retirement income.
The report also found that although those retiring in 2021 plan to spend an average of £21,000 a year, which is around £10,000 less than the average UK household income, many are still at serious risk of outliving their pension fund.
In fact, even with the state pension, only one third of this group will have enough money to support themselves for the entirety of their retirement if they plan on spending the £21,000 a year. Furthermore, even though the average pension fund of this group is £366,000, a third have less than £100,000 saved.
Despite the concern that many who are planning on retiring this year will not outlive their retirement fund, Covid-19 has resulted in many people accelerating their retirement plans.
Here in the UK, the Covid-19 pandemic has resulted in multiple lockdowns, job uncertainty and health concerns, all of which are reported as reasons why some people have decided to retire earlier than they originally planned. However, according to the Standard Life Aberdeen report, only 39% feel “very confident” that they’re financially ready to finish working and more than 37% of those planning to retire are concerned that they will not have enough to sustain themselves for the entirety of their retirement.
Retiring is one of the biggest life decisions and transitions a person will make and with longer life expectancy, volatile markets and changing regulations, not to mention the impact of the Covid-19 pandemic, it can be an incredibly confusing time.
As the Standard Life Aberdeen report has shown, retirement takes careful planning and preparation and although pension pots tend to be the most prevalent option for pension funds, retirees should also consider any of their other savings or assets that could be used to fund their retirement.
Retiring during a pandemic comes with many challenges, but it will be much easier to adapt your retirement plan than starting from scratch.
Corinthian can help you meet your retirement dreams. Get in touch – we would love to have a chat! Please contact us at firstname.lastname@example.org Tel: 0845 2419541