A new report reveals how two-thirds (66%) of adults planning to retire this year risk running out of money. The research found that a 2021 retiree plans to spend, on average, £21,000 a year in retirement – almost £10,000 less than the average UK household income (£29,900).
Just two in five (39%) feel very confident that they’re financially ready to finish working this year, with a third (34%) of women feeling very confident versus two in five (43%) men.
Longer-term financial priorities and plans
Almost half (48%) of those surveyed are planning to reduce their usual spending to support themselves in retirement, while a quarter (27%) will work part-time to help financially. One in five (21%) are planning to sell their home or downsize to fund retirement.
Deciding how and when to retire is one of the biggest life decisions and transitions we make. Longer life expectancy, volatile investment markets and ever-changing regulation can make planning and preparing for retirement feel confusing, not to mention the impact of the coronavirus pandemic on people’s immediate and longer-term financial priorities and plans.
Apprehensions about retiring during a pandemic
Whatever the plan, when it comes to making the decision to retire, most people find it understandably daunting. Even more so if you don’t feel prepared. There are clearly more apprehensions about retiring during a pandemic amongst this year’s retirees.
When it comes to their finances, three in ten (29%) people surveyed said they have concerns about their pension falling in volatile markets, and almost one in five (17%) have seen their income fall over the past year.
Most popular option for funding retirement
Pensions are without a doubt the most popular option for funding retirement, but it’s important retirees also consider any other savings or assets they can use when deciding whether they can afford to retire or not.
Understanding what money you have for your retirement and how to spend it wisely can be difficult, but that’s where preparation and obtaining professional financial advice can help. Circumstances or priorities may change, particularly if you’re retiring amidst a global pandemic, but it will be much easier to adapt a plan you already have, than if you were to have to start from scratch.