People nearing retirement have a growing sense of uncertainty, confusion and fear that they’ll run out of cash in their golden years or will have to rely on their children during retirement.
An Oxford Risk study showed more than half of Brits aged 55 and over, roughly 10.5 million people, worry their retirement funds will run out during their lifetime.
A concerning 86% believe it’s important for them to have additional income sources as they wouldn’t be able to fund their desired retirement on state pension alone.
However, the same people “waking up” to this fear with just over 10 years until they hit state pension age also have “widespread confusion” about their pension savings.
The study showed 49% of people in this age group said they understood their retirement options.
Only 31% said they would still be comfortable with the risk of having their pension invested in the stock market after they’ve retired.
People with savings had more financial comfort than those without savings ahead of retirement, a finding the study dubbed “unsurprising”.
People with a Self-Invested Personal Pension felt the most comfortable compared to any other method of funding retirement, the study said.
Oxford Risk head of behavioural finance, Greg B Davies, noted, according to Pension Age: “People approaching retirement face a series of critical decisions that will shape their lifelong financial wellbeing, and it’s clear that many feel confused and uncertain about their options.
“The biggest concern for many is ensuring their savings will last throughout their retirement. Personalised financial planning is essential to help individuals feel confident and comfortable with their choices.”
These new results come after a previous study by the behavioural finance experts which revealed women over the age of 55 have some added challenges.
In comparison to their male counterparts, the study found that women were more likely to expect lower pension income but also more likely to experience a financial shortfall in retirement.
The study showed more than a third of women over the age of 55 weren’t sure how much they would get from their pension while also on average having £80,000 less in cash savings than men, according to IFA magazine.
