Retirement may seem like a distant dream for many workers, but nearly nine out of 10 idle their days away planning to give up work, according to a new report.
But less than one in 10 take any action to review their retirement saving plans to make sure they are on track to meet their dreams.
Pensions, life and savings giant Standard Life says most over 45s are failing to make plans to match their hopes for retirement.
Research for the firm revealed only 8% have checked when their pension starts paying out, 56% do not have any clear ideas about when they want to stop working and only 10% have worked out how much money they will need when they retire.
Time and money
And older workers are not doing much better – only 17% aged between 55 and 64 years old have checked their pension to see if their retirement date aligns with their plans.
Jamie Jenkins, head of pensions strategy at Standard Life: “Some people will have set their retirement date when they were in their 20s or 30s and a great deal will have changed since then, including their state pension age and perhaps their career plans.
“It may seem like a finger in the air guess when you’re younger, but the date that you set for retirement on a pension plan does matter. It will often dictate how your money is being invested and the communications you receive as you get nearer to that date.”
Reviewing retirement dates is vital
Jenkins explained that savers should keep an eye on their pensions for four main reasons:
- Keeping in the loop – Savers need when they can take their pension and how much is in the pot
- Protecting investments – It’s a good idea to move pension cash out of risky funds in the years leading up to retirement
- Size matters – Knowing how much pension cash is in the fund determines when many people can retire
- Annuity or drawdown – Planning how to take pension cash is an important decision
“Reviewing your retirement date regularly as you get older makes real sense and most modern pension plans enable you to change and update this date whenever you choose,” he said.
“It needn’t be the same as your state pension age, you might want to work longer, or retire earlier.
“Some people who plan to slow down or stop work earlier are using money from their private pension savings to bridge the gap until they can start claiming state pension.”