Nearly half of Yorkshire’s over 60s are unaware of how much they currently have in their pension pot, and a third expect to be working at 70 and beyond, a new survey suggests.
An “alarming” number of the country’s working over 60s are unprepared for their retirement and greater numbers envisage a longer working life than previous generations, according to findings from a new white paper published by wealth management firm Sanlam.
Yorkshire had the highest number of people who did not know how much they had in their pension pot, 48 per cent, with the same number admitting to feeling “unprepared” are they approached retirement.
Just three in ten said they expected to be able to retire outright or over a short period of time, with just under a third saying they expected to still be working at 70 or even older.
None of the pre-retirees question anticipated retiring before the age of 61, while of those who had retired in the last five years, 40 per cent said they retired later than planned. Of those already retired in Yorkshire, 60 per cent said they were able to retire earlier than anticipated - something the report says is likely to become a thing of the past for future retirees.
The report, released a week ahead of the spring budget suggests that an increasing ageing population, the demise of generous final salary schemes and the pension freedoms introduced last April are all contributing to a radically shifting retirement landscape.
It also suggests that many over-60s remain in the dark over new pension freedoms, with one in five in Yorkshire saying they were unaware of what they entailed. The reforms contained a range of measures, including allowing retirees to take 25 per cent out of their pension pot as a tax-free lump sum.
The report’s author, pensions specialist David Dunn, said the contrast between those who had recently retired and the views of those still in work showed a “seminal change” was taking place, and both the Government and pension providers needed to be “innovative” in providing retirees with proper guidance.
He added: “The face of retirement planning is changing. Following the Government’s new pension freedoms introduced in April, people now have more choice as to how they use their pension pots. Although this gives people more flexibility to organise their finances, it also brings extra responsibility when making such important decisions.”
The chief executive of older people’s charity Independent Age, Janet Morrison, said planning for retirement “is more important than ever”.
She said: “The Government offer guidance through the Pension Wise, and we’d encourage people to use services like this. But it is not just about pensions. Many people we talk to are not aware of the benefits that they might be entitled to or how much social care could cost them, which could be tens of thousands of pounds a year. We’d encourage them to speak to an advice service like Independent Age as part of planning for what we hope will be a productive and fulfilling older age.”
The Department of Work and Pension spokesperson said: “We know that many people are not saving enough to maintain their standard of living in retirement. That’s precisely why we introduced wide ranging reforms to make pension saving easier, clearer and more sustainable.
“Millions stand to gain from the new State Pension, including women and the self-employed, who so often lost out in the past. From safeguarding the Triple Lock and encouraging millions more to save through automatic enrolment, we are committed to helping people have a financially secure retirement.”