Four in ten over-60s still “unprepared” for retirement

11 Mar, 2016

An alarming number of the UK’s working over-60s population are unprepared for their retirement, according to findings from a new white paper published by wealth management firm Sanlam.

The Which Way Forward? report, released a week ahead of the Government’s spring budget, suggests that an increasing ageing population, the demise of generous final salary schemes and the pension freedoms introduced last April are all contributing to a radically shifting retirement landscape. As a result, as many as 40% of non-retired over-60s today feel unprepared for their future.

The report, which uses qualitative research, compares the attitudes of 1,000 people who have retired in the last five years with 1,000 over-60s approaching retirement. It suggests there are many who still feel in the dark about their retirement, with 29% saying they weren’t aware of the new pension freedoms which the government introduced in April 2015.

The results are surprising, particularly given the new freedoms were intended to give future retirees more autonomy with their savings. Some 39% of over 60s admit that they are unaware of how much they currently have in their pension pot.

Running concurrently with this uncertainty, future retirees also now envisage a longer working life than previous generations. Less than 2% of pre-retirees anticipate retiring before the age of 61 and around 30% expect to still be working at 70 and beyond. In stark contrast, nearly half of those that were in retirement when questioned for the report had retired before the age of 61, and almost all had retired by 67.

The report suggests that fixed-age retirement has already become an outdated concept and will no longer be possible for the majority of the current working generation. Whilst Britons have traditionally worked towards a fixed retirement date, nearly half of pre-retirees now envisage partial retirement which is phased in over a few years, with only 3 in 10 expecting to retire outright or over a short period of time. The remainder of those questioned were undecided.