Two in five (37%) people retiring this year are worried they won’t have enough money to last through retirement, according to research by abrdn.
Overall, just two in five (39%) of those planning to retire this year feel very confident that they are financially ready. Within this, women feel less financially ready to retire than men, with just a third (34%) feeling very confident, compared with more than two in five men (43%).
Of the soon-to-be retirees surveyed for abrdn’s Class of 2021 report, nearly half (48%) said they plan to reduce their spending habits to support themselves in retirement, while nearly one in three (27%) expect to continue to work part time and a fifth (21%) plan to sell their property or downsize.
The research by abrdn found that just two fifths (39%) of those set to retire this year said that they had sought financial advice specifically for their retirement, while others have researched options online (55%), asked friends and family for advice (30%) and received support and information from their employer (23%) to prepare for retirement.
Ben Hampton, Retirement Advice Specialist at abrdn, said: “With retirement potentially lasting 30 years or more, it’s vital that people are fully aware of how they’re going to make their money last.
“After the last few years, we think initiatives like Pensions Awareness Week are more important than ever for people to get back on track with retirement plans after so much upheaval in other parts of their lives.
“Being aware of how much you will need to meet your retirement goals, how much you can afford to spend and how this could change as the years go on, as well as considering how to piece together different types of income options, can be daunting. This is why preparation is key.
“The government’s health and social care levy announcement adds a new element to the retirement planning puzzle. If you decide to work part time through retirement, especially after state pension age, you’ve got a new dynamic in the mix. Speaking to an expert will help you plan so you can take full advantage of the options available to you.”
Despite concerns about their financial preparedness, abrdn’s research found that most (96%) of the Class of 2021 are emotionally ready to retire with this year’s retirees looking forward to the freedom to have their own schedule (76%), not having to work (56%) and spending more time with their friends and family (55%).
Yet while more than eight in ten (85%) are ready for the change in lifestyle from their current working schedule, nearly one in five (17%) say not having a routine does worry them.
Ben continued: “Emotional preparedness is a vital factor to think about when it comes to retirement, and plays a huge part in the financial considerations. When you feel ready to retire, and know what you want your retirement to be, it undoubtedly influences what the financial profile of your retirement will look like.
“The big lifestyle changes that retirement transition brings can be unsettling, and particularly so if you don’t have a plan in place. A well-developed retirement strategy will help give you the confidence that everything is in place to help deliver the retirement that you want.”