A nationwide survey of 1,000 middle income earners aged 45 to 55 has found that one in eight have no idea when they will be able to retire despite having a higher than average income.
Only 30 per cent said they have a Financial Plan in place with a similar number failing to consider in detail how they would fund their retirement and one in eight (13%) saying they had no idea about when they could retire and had no retirement plan. One in four planned to carry on working indefinitely.
The research was backed by Alliance Trust Savings and it discovered that one in eight within 20 years of retirement, and who currently have an above average income, do not know “how or when” they will be able to afford to stop working.
The survey interviewed 1,000 45 to 55-year olds with either individual incomes of £35,000 or more a year or household income of at least £60,000, and who had some level of household savings, about their financial situation and plans.
Although a third (30%) had clear goals in place for retirement and financial plans in place to achieve them, a similar number (29%) had not thought seriously about funding their later life and one in eight (13%) did not know how or when they would be able to give up working.
While almost three quarters said they would rely on a workplace pension to fund retirement, one in five (22%) said they would rely on an expected inheritance to fund their retirement and a quarter (26%) expected that they or their partner would continue to work.
Many financial advisers focus on younger generations and those in or at retirement, so it can be easy to overlook the scale of the financial challenges facing people in their mid-life years.
Those within 10 years of being able to access their pension savings are often faced with a raft of potentially complex challenges, from the cost of raising children and looking after ageing parents to dealing with divorce or the threat of redundancy. All the while keeping household finances in shape and setting money aside for later in life.
The research was carried out by personal finance website Boring Money last September. It is based on a nationwide sample of 1029 people, with either individual incomes of £35,000 or more a year or household income of at least £60,000, and who had some level of household savings.
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