Nearly two out of five pensioners, the equivalent of 4.4 million people fear running out of money during their retirement as they lack guaranteed income, MetLife has revealed.
The nationwide study found that 38 per cent of pensioners worry that their guaranteed retirement income is not sufficient for their needs. This concern, MetLife has said, underlines “the challenges for savers of balancing flexibility with guarantees”.
An additional 75 per cent of over 40s noted that having their guaranteed income as well as their state pension in retirement is important to them.
The study highlighted that average pensioners have around 68 per cent of their retirement income including state pension guaranteed for life.
On average, however, savers want 60 per cent of their retirement income to be guaranteed and more than a quarter, 26 per cent said they wanted all of their income to be guaranteed.
Furthermore, close to half, 49 per cent, of pensioners questioned said that some or all of their income comes from a workplace final salary scheme.
While the launch of the pension freedoms has lessened the need to secure a guaranteed income in retirement, the study shows that savers recognise the need to have the majority of their retirement income guaranteed for life.
MetLife UK wealth management director Simon Massey said: “The message from those who are already retired is that guaranteed income is absolutely vital in retirement planning.
“Millions of pensioners fear they don’t have enough guaranteed income and are worried about running out of money and the risk is that the problem is only going to get worse for savers who are coming to terms with the new pension freedoms.
“It is encouraging to see savers want to have an average 60% of their income in retirement guaranteed but they could face challenges in achieving that. People retiring now and in the future need to consider solutions such as guaranteed drawdown. It combines the certainty of a guaranteed level of income for life with the flexibility to access your savings if you need to and provides the potential for investment growth.”