There’s a big gap between how people would like to spend their retirement and their financial reality, according to a new survey.
Travelling, taking up hobbies and funding children and grandchildren are the hopes of many when they retire, but the likelihood is they are likely to face a financial struggle for the rest of their lives.
The finds come from a new study by financial firm Aviva.
Research revealed a third of those approaching retirement believe they have just enough money saved to ‘get by’, while one in four think their life will be financially tough.
Only 17% were confident that they had enough money to enjoy their golden years.
Despite these realisations and hopes, a third said saving for retirement was not among their financial priorities.
But people’s views seem to change with age.
Three golden rules of saving
While only 20% of workers aged between 22 and 30 years old believed saving for retirement was important, this rose to 54% of 56 to 65 year olds.
To help savers prepare better for retirement, the firm has come up with three saving rules:
- Start saving 40 years before you retire
- Save at least 12.5% – an eighth – of your monthly salary for retirement
- Aim to have saved 10 times your annual salary by the time you retire
“The retirement dream may not be the retirement reality for many people,” said Alistair McQueen, Head of Savings and Retirement at Aviva.
“Travelling the world is clearly a goal for some people, but if you’re not prioritising saving for retirement, that dream trip may never come true. We know people are facing many financial pressures, which often make saving more difficult.
“But saving into a pension should be aspirational. We need to remind ourselves that we are putting aside money for a better life in the future.
“Retirement is something we should all look forward to, but we should be aiming to thrive, not just survive. To make our dream retirement a reality, the planning starts now.”
What people want to do when they retire
|Take up a new hobby/continue with old ones||29%|
|Give financial help to children/grandchildren||21%|
|There isn’t anything I would most like to do||18%|
|Buy a holiday home||15%|
|Start your own business||10%|