With uncertainty following the pandemic and now the current cost of living crisis, many retirees and pre-retirees are facing the difficult task of planning their finances for a seemingly turbulent future.
New research from Royal London, the UK’s largest mutual life, pensions and investment company, found that to weather this economic storm, the 55+ generation are looking to further options outside of their pensions to fund their retirement and allow them to make the most of it.
- Six in ten (58%) people say they would consider working in retirement, citing remaining active (59%) and money (45%) as the two main reasons for doing so.
- The majority of over 55s (71%) say they are yet to achieve their life goals with money being the biggest barrier (40%).
- Nearly half (40%) say they would work if it enabled them to do more things they enjoyed and 45% say they would work if they were struggling to pay their bills.
This apprehension around money is rooted in the attitudes of pre-retirees as well, with 39% being concerned about being able to afford to live the lifestyle they want and 38% worrying about having enough money to get by. Outside of money, pre-retirees are also concerned about staying fit and healthy (52%) and one in ten (12%) are worried about staying in touch with friends and family.
As 2023 is set to be a tough year financially for the UK, financial planning will be key for everyone, especially those looking to retire or those currently in retirement. To aid with this, Royal London have also provided five tips for financial planning in 2023:
- Consider purchasing or continuing your life insurance. Often seen as a non-essential expense, life insurance gives the peace of mind that sound the worse to happen, your loved ones would not be left with additional financial burden alongside the emotional trauma.
- Make sure you’re getting the best deal possible with your savings accounts. It’s a tough market currently, but it’s important to ensure your money is in a ‘best buy’ account and not one languishing at the bottom of the league tables. Continue to check this regularly to ensure you’re getting the most out of your savings account.
- Keep contributing to your pension where possible (if not yet retired), especially if you also get a contribution from your employer. However, only do this if you have an emergency savings fund in place first; it’s essential to have something to fall back on for unexpected events.
- Planning for retirement should still be on the cards. With spiraling costs, it’s easy to stop thinking ahead and instead focus on surviving in the now, but financial stability is a long-term game. To achieve an affordable life in retirement you need to plan for it.
- Don’t struggle alone. There is help out there. If you are struggling with debt, talk to your lender or a debt advice charity such as StepChange or National Debtline who will give you help with your debts, free of charge.
Gary Beyer, Protection Product Lead from Royal London, comments: “It is clear to see that those aged 55 and over value experiences more than anything else, including material possessions. Being able to lead an active, healthy lifestyle, try new things and travel to new places – combined with spending more time with family – is the key to retirement happiness.
“After a tough few years following the pandemic and now with the added pressures of the cost-of-living crisis, being able to achieve these life goals might seem more difficult- But, there are options out there for people who want to make their dreams a reality.”