Two Thirds' Of 2021's Retirees May Run Out of Money

Cat Pic

Catherine Tilke

Money Savings Advice Helping people with their retirement

Two-thirds of adults planning to retire this year risk running out of money during retirement, warns a new report.

Despite the average retiree planning to spend just £21,000 per year in retirement, at least one-third of to-be pensioners told Standard Life Aberdeen they have less than £100,000 saved.

On average, when state pension and personal savings are taken into account, Standard Life found the average pension pot worth £366,000- enough to last 17 years, without taking changes in the cost of living.

Vast numbers of those retiring this year risk running out of money in their retirement. Retirement is a marathon, not a sprint, and many could be going into it without sufficient preparation or planning.

Pension pots are without a doubt the most popular option for funding retirement, but it's so important that retirees consider any other savings or assets they can use when deciding whether they can afford to retire or not.

Almost two-thirds of people planning to retire this year have brought their plans forwards due to Covid-19, according to Standard Life.

Despite this, only two in five people said they feel very confident that they have enough money to retire comfortably.

At the start of the year, pensions provider LV found that more than 154,000 people aged 55-64 brought forwards plans to retire as a result of Covid-19: either due to redundancy, reduced income, fear of contracting Covid or re-assessing their priorities.

Some 211,000 people in the same age group reported tapping into their retirement savings to cope with redundancies or reduced income due to the pandemic.

Early retirement is attractive for many people – but it can become a financial nightmare if it is forced on people without any planning because of redundancy or illness.

Your 50s are critical years for retirement planning because that is the age when many people's earnings and pension contributions peak. Being forced to end a career before you planned will disrupt retirement plans.

The 'Class of 2021', as Standard Life dubs this year's retirees, has no misgivings about this: more than half (51%) of those who opted for early retirements say they are worried about not being able to enjoy the things they planned.

John Tait called on those daunted by their retirement finances to seek expert advice:

"Understanding what money you have for your retirement and how to spend it wisely can be hard, but that's where preparation and speaking to an expert 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."

Money Savings Advice Author Catherine Tilke

Catherine Tilke

Catherine is our specialist financial news journalist. With over 7 years of experience and a raft of contacts in the financial world, she prides herself on delivering the most relevant and up-to-date financial news for our readers.

How does Money Savings Advice work

Money Savings Advice is an independent editorial company providing detailed information about numerous financial niches with the aim of helping consumers make informed financial decisions. We aim to provide hints, tips and techniques to help you make your money work for you. However, we are not perfect, and we accept no liability if anything we write about goes wrong.

  • The information detailed on Money Savings Advice does not constitute financial advice. It is always advised to do your own research to make sure the product/solution we write about fits your circumstances.
  • The aim of Money Savings Advice is to match you with a financial advisor, claims management company or another financial service company that can help you with your financial needs.
  • Money Savings Advice aim to provide the most up to date and accurate information about all financial subjects, and as such we sometimes link to other websites, but we (Money Savings Advice) can’t be responsible for their content.
  • Money Savings Advice is independent and not linked to any financial company.

 

Who are Money Savings Advice

Money Savings Advice is a trading name of RMM Digital Publishing Ltd. Registered trading address, First Floor, 85 Great Portland Street, London, W1W 7LT. Trading in England and Wales, company number 11550143 with data protection number ZA747669.

Money Savings Advice is a trading style of Consumer Credit Justice Ltd.

Consumer Credit Justice Limited is authorised and regulated by the Financial Conduct Authority, Reference 834486. We are regulated by the FCA in respect to claims management activities.

You do not need to use the services of Consumer Credit Justice, or any other claims management company, to make a claim. You are free to choose an independent solicitor of your choice.

Back to top