‘Retirement anxiety’ is increasingly becoming an issue for over 40s, due to the financial pressures of the rising cost of living on income and savings, according to new research launched today from financial planners, abrdn.

abrdn’s latest research into the nation’s retirement anxieties highlights that nearly two thirds (58%) of UK adults aged 40 years+ are anxious about retiring, up from 54% in 2022. A fifth (20%) admitted they are ‘very anxious’, a 70% increase on 2022’s figures (12%) with 18% saying that anxiety is severe enough to keep them awake at night and one in ten (11%) said it is affecting their personal life and relationships.

The research unveiled both financial and emotional reasons behind this growing trend, with more than two fifths (43%) citing their retirement anxiety was driven by not having saved enough to be able to afford to retire.

Nearly four in ten (39%) are worried about the rising cost-of-living impacting retirement plans, while almost a quarter (24%) are worried about how the current economy will impact their investments and pension and over a quarter are embarrassed about not starting to plan earlier (27%).

Further causes for the anxiety included being worried about being pigeonholed as ‘old’ (17%) and losing their identity when they stop working (14%).

abrdn’s research also found more than one in eight (13%) have delayed retirement plans as a result of feeling anxious, increasing to 18% for those aged 55+.

Across the population, the areas of finances people feel most concerned about when it comes to leaving the world of work are not having enough money to last throughout retirement (39%), not being able to afford to do the things they want to do (33%) and how to save for retirement while still having enough money to live on now (29%).

Despite these concerns, almost half (41%) have done nothing to prepare for retirement.

Shona Lowe, financial planning expert at abrdn said: “The prospect of retiring can be a daunting one, whatever your age, particularly against a backdrop of rising interest rates, high inflation levels and an ongoing cost of living crisis. It is completely normal to experience anxiety about retirement; you’re gearing up for a big change that has a number of variables and factors to take into consideration. But it is concerning to see an increase in the number of people that are experiencing retirement anxiety in our latest research and to find that for some, the level of that anxiety is affecting their ability to sleep and their relationships.

“While many will be thinking about the financial aspects of retirement, others will be worried about the lifestyle and emotional impacts. To ease retirement anxiety, there are a number of steps you can take, including talking to a loved one about your plans, putting a robust plan in place or even continuing to work flexibly in retirement to ease financial concerns and give you a sense of security.

“There are also benefits for many in seeking advice from a professional adviser in order to get a clearer understanding of your financial situation and how to best prepare for this important life stage.”

Shona’s four tips to ease retirement anxiety

1.Understand how much money you have and what you’ll need

Many people think of their pension and the state pension as their only sources of retirement income. But don’t forget about ISAs, other savings and investments, or rental income from any property you let out. You may have more than you think.

Next you’ll need to estimate how much you’ll need to spend each year in retirement. This amount differs for each person depending on the type of lifestyle you want to lead, so there is no one size fits all answer.

2.Consider working in retirement

For many, gone are the days where retirement meant stepping back from the world of work altogether. Instead, there are an increasing number of retirees that intend to do some sort of work even once they’ve officially ‘retired’.

Whether it be setting up businesses, pursuing a ‘flexi-retirement’ and working part-time, or doing whatever it is that makes you happy, retirement really is what you make of it so don’t feel pressured into stopping work if that doesn’t feel right for you.

3.Take advantage of the support available to you

Retiring is one of those ‘big steps’ that we see in our futures but for many, it always feels like it’s ‘further down the line’, even when we are fast approaching it.

People experiencing retirement anxiety may be thinking about it constantly, be unable to sleep, and generally feeling overwhelmed – it can impact their relationships and performance at work. To help with all of this, it’s really important to seek support from people you trust.

There is also a lot of great free information and support available that may help to you to feel more informed and in control.

The Money Helper website is a free and impartial source of guidance on pensions and retirement, including phone and online support from their team of pension experts.

4.Seek financial advice

Navigating retirement is no easy feat, especially with the continued high cost of living at play and many are worrying whether they will be able to afford the retirement they want.

Speaking to a financial adviser could help you to understand what you will have available to fund retirement, how that compares to your spending needs and give you peace of mind when mapping out your future. Advisers work every day to give retiring clients, clarity, control and confidence about their future.