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Despite the
economic slowdown, pensioners are failing to budget for life in
retirement, finds new research by Prudential.
More than a quarter (29 per cent) of pensioners admit to spending
more in their first year of retirement, on average splashing out
£8,000 more in this year, than in subsequent years. The survey
found that once the reality of living on a pension comes to light,
they regret the splurge.
The research also found that 19 per cent of those who had spent
more in the first years of retirement regretted doing so, and only
32 per cent of retired UK adults said they set a retirement budget.
Thirty four per cent seem to ‘play it by ear’ and just
17 per cent saw a financial adviser for advice on living on a pension.
Despite the lack of advice and saving, 63 per cent of the retired
UK adults who took part in the survey said they felt they had planned
their finances adequately before retiring.
Gary Shaughnessy, managing director of retail life and pensions
at Prudential, said; “It is quite worrying to see the lack
of planning people undertake as they approach retirement and it’s
particularly surprising to see how few of today’s pensioners
sought financial advice.”
Prudential cites one of the key concerns as being the question mark
hanging over longevity, with people having no idea how long they
will live in retirement and therefore not considering the longer
term implications of over-spending when they first retire.
Shaughnessy added: “The key is to carefully manage your money
throughout retirement, ensuring you don’t give away or spend
money that you may need in 20 years time.”
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Pensions Age July 2008
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