If you think you cannot afford to retire take comfort in the knowledge that you are by no means alone. In a recent Aegon survey of independent financial advisers (IFAs) an alarming trend was identified.
IFAs are warning that growing numbers of people are not going to be able to retire in their sixties and live comfortably on the investments and pensions they have accumulated.
The latest Aegon’s IFA Insight Survey found that 88% of advisers believe the average retirement age will rise significantly in the next 10 years, while 71% say people are already resigned to a significant reduction in their standard of living in retirement. Either way it is clear that significant numbers of people have not prepared adequately for retirement.
People are also more likely to support their children for longer but possibly as a consequence are also likely to eat into the family inheritance in their retirement so leaving less to their children.
In order to address the savings gap the majority (90%) of IFAs would advise investing in pensions. But public confidence in pensions has been severely dented over the last 10 years and people are looking at alternatives such as investing in stocks and shares or in buy to let properties. Buying properties abroad is also a growing option even although prices don’t increase anything like as fast as in the UK. The consolation is that given the sun and fun living out one’s retirement on reduced means will be less painful.
IFAs believe that pensions are still the better option for most people but without Government intervention in terms of tax breaks or other incentives plus a PR campaign to revitalise the image of pensions it will continue to decline as an option of choice.
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