A recent report has revealed that nearly half (49%) of retirees in the UK entered retirement without a clear financial plan for their post-work years. The study, conducted by Just Group, highlights the lack of financial preparedness among retirees.
More than one-third (35%) of retirees aged over 55 admitted they retired without assessing their financial ability to support themselves during retirement. Additionally, 14% of respondents were forced into retirement earlier than expected, leaving them without sufficient time to plan.
Surprisingly, fewer than one in ten retirees (8%) sought help from an independent financial adviser (IFA) to guide them through this significant life transition.
Stephen Lowe, group communications director at Just Group, stressed the importance of financial advice in retirement planning. He commented, “Receiving financial advice remains the gold standard for preparing financial plans ahead of retirement. If possible, we’d encourage people to explore this option. Your employer may offer assistance, perhaps by recommending an IFA or even contributing financially towards the cost. The rise of the digital world also means there are lower-cost online and hybrid solutions available for guidance or advice.”
Lowe also urged retirees to utilise free resources such as Pension Wise, the UK government’s impartial pension guidance service. “At the very least, people should ensure they take advantage of their entitlement to Pension Wise,” he added.
However, the report found that only 6% of those surveyed had used Pension Wise to assist with their retirement planning.
Some individuals chose a do-it-yourself approach, with 34% conducting their own review of savings to estimate future income and expenditure. Others relied on informal support, with 10% seeking advice from friends and family, and 6% using other sources.
The Just Group survey was conducted between 17 and 27 August 2023, polling 1,050 UK adults aged 55 and over.