Millions of British people could be sleepwalking their way towards an inferior retirement lifestyle – simply because they have no idea how much money they’ll require.
Nearly half of the UK working population (48%) have an “ostrich mentality” when it comes to saving for retirement. Whilst only 6% can class themselves as “wise owls” – meaning they are on track to achieve their savings target through a broad portfolio of pensions and investments, potentially because of receiving financial advice.
These surprising trends were unearthed by Skipton Building Society’s Retirement Tracker; a new piece of research carried out with YouGov, which monitors the retirement savings behaviours of over 6,000 UK consumers*.
We’ve identified five typical profiles of non-retirees, reflective of the attitudes and plans people have towards preparing for retirement.
The Ostrich mentality (49%)
By some distance the most common type of non-retiree, these people have not yet saved anything towards retirement and have no idea how much they’ll need to save for it. Many people in this group unrealistically believe the state pension alone will fund the lifestyle they want.
Light touch saver (21%)
The next most common group of non-retirees are at least saving for the future through a pension, a Cash ISA or by over-paying on a mortgage – but they don’t have a set target in mind. Without a specific retirement plan, there’s every danger they’ll fall short of having the finances they need.
Unprepared saver (18%)
Like light touch savers, this group of non-retirees are saving without a target, preferring to go with the flow. They don’t have anything else in place to fall back on should their retirement savings prove inadequate, relying on the state pension to help them.
Serious saver (6%)
More cheerfully, this group are very good at making targets and sticking to them. They consciously try to make sure they’re storing enough money away for a financially fit future. They’ll ask for advice or do their own research when needed. They’re content to focus on savings accounts, but tend to shy away from looking at other financial options.
The savviest group, these people are on track to meet their retirement savings targets, seek professional advice when they need it and have a broad portfolio of personal pensions or investments. They like to be prepared and want to make sure they’re financially stable – no matter what the future holds.
How prepared are you?
If you feel more unprepared than expert – or are struggling to see the future because of all the sand around your head – we can help you to feel more prepared.
We offer tailored financial advice to help you consider what you’ll need in retirement to achieve your objectives, and how your finances measure up towards achieving them. There’s no pressure to act on our recommendations – you can take as long as you need to decide your next steps.
To benefit from a review of your existing pensions you need to have at least £75,000 in defined contribution schemes.
Our Retirement Tracker found that nearly two-thirds of working people have never consulted a financial adviser about their pension or retirement goals. Meeting your nearest Skipton financial adviser could make a huge difference to your future, allowing you to put plans in place for your life ahead.
* All figures are from YouGov Plc. The total sample size was 6,120 adults. Fieldwork was undertaken between September and November 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Our recommendations are likely to include stock market-linked investments. These aren’t like building society savings accounts, as your capital is at risk and you may get back less than you invest. The value of your investments and any income from them may fall as well as rise.