3 million over-50s plan to leave retirement finance planning to last minute

Over a third (37 per cent) of over-50s, equivalent to more than 3 million workers, will leave planning their retirement finances until the final two years before retirement or not prepare at all, according to research from the Money and Pensions Service (Maps).

The research revealed that whilst 27 per cent of over-50s are holding off on retirement planning until two years or less before retirement, a further 10 per cent won't plan their retirement at all.

Maps stated that the findings showed that unretired people are unprepared for what’s to come, with 69 per cent having done either none or very little planning around retirement finances, and just 7 per cent of over-50s feel fully prepared.

Over half (56 per cent) of recent retirees, those aged up to 70, stated that they would encourage ‘Gen X’ to start planning their retirement finances earlier, while nearly two-thirds urged younger workers to save more towards retirement.

The research has also revealed the impact of the pandemic on savers, with over a third (36 per cent) of 50-70 year olds stating that their finances have been impacted as a result of Covid-19.

This in turn has seen nearly one fifth (18 per cent) decide to delay accessing their pension, whilst 14 per cent are accessing it sooner, with 10 per cent doing so to aid their own day-to-day finances, and 4 per cent doing so in order to support a family or friend.

Maps has since urged savers to plan their retirement finances earlier, also stressing the importance of seeking guidance through services such as Pension Wise, which is holding an additional virtual session in light of Pensions Awareness Week.

Maps head of pensions policy and strategy, Carolyn Jones, commented: “Given over a third of over-50s have had their finances affected by Covid-19 and we’re now facing a recession, we’re urging people not to delay or skip planning their retirement finances – whether you’re thinking of retiring later or bringing it forward.

“Your pension is likely to be one of the most valuable assets you hold so it’s really important to start planning early to make sure you make the best choices based on your circumstances.

“Getting help and talking through your options now could be the difference between having a comfortable retirement or having to work for longer or adjust to living on a lower income."

She continued: “We know that taking pensions guidance works. People who have had an appointment with our Pension Wise specialists feel more confident, informed and prepared when it comes to how they will access their pension savings.

“In 2019/20, more than half of appointment customers said that getting guidance either changed how they accessed their pension, or how they intend to do so.

“As well as offering our usual telephone appointments to provide that guidance, during Pensions Awareness Week we’ll be hosting a virtual drop-in session where any burning questions can be asked as well as general discussion about preparation.”

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