With uncertainty following the pandemic and now the current cost of living crisis, many retirees and pre-retirees are facing the difficult task of planning their finances for a seemingly turbulent future.
New research from Royal London, the UK’s largest mutual life, pensions and investment company, found that three in ten (30%) people over 55 are changing their retirement plans due to the current cost of living crisis, and the majority (71%) said they are yet to achieve their life goals with money being the biggest barrier (40%). The research also found:
- 72% of retirees and pre-retirees are experience-focused, favouring holidays, days out and hobbies over material possessions such as houses, cars and expensive art.
- More than half (52%) cites spending time with family as the most important aim for retirement.
- For pre-retirees, nearly four in ten (39%) are concerned about being able to afford to live the lifestyle they want in retirement, with 38% worrying about having enough money to get by.
To ensure they meet their goals of retirement, over 55s are looking for further ways to fund their plans. Around six in ten (58%) say they would consider working in retirement and two in five (40%) say they would work if it enabled them to do more things they enjoyed. 45% then say they would if they were struggling to pay their bills.
As 2023 is set to be a tough year financially for the UK, financial planning will be key for everyone, especially those looking to retire or those currently in retirement. To aid with this, Royal London have also provided five tips for financial planning in 2023:
- Consider purchasing or continuing your life insurance. Often seen as a non-essential expense, life insurance gives the peace of mind that sound the worse to happen, your loved ones would not be left with additional financial burden alongside the emotional trauma.
- Make sure you’re getting the best deal possible with your savings accounts. It’s a tough market currently, but it’s important to ensure your money is in a ‘best buy’ account and not one languishing at the bottom of the league tables. Continue to check this regularly to ensure you’re getting the most out of your savings account.
- Keep contributing to your pension where possible (if not yet retired), especially if you also get a contribution from your employer. However, only do this if you have an emergency savings fund in place first; it’s essential to have something to fall back on for unexpected events.
- Planning for retirement should still be on the cards. With spiraling costs, it’s easy to stop thinking ahead and instead focus on surviving in the now, but financial stability is a long-term game. To achieve an affordable life in retirement you need to plan for it.
- Don’t struggle alone. There is help out there. If you are struggling with debt, talk to your lender or a debt advice charity such as StepChange or National Debtline who will give you help with your debts, free of charge.
Gary Beyer, Protection Product Lead from Royal London said, “It is clear to see that those aged 55 and over value experiences more than anything else, including material possessions.
“Being able to lead an active, healthy lifestyle, try new things and travel to new places – combined with spending more time with family – is the key to retirement happiness.
“After a tough few years following the pandemic and now with the added pressures of the cost-of-living crisis, being able to achieve these life goals might seem more difficult -But, there are options out there for people who want to make their dreams a reality.”