Spending rather than saving is the biggest financial regret of over 55s approaching retirement, says research by a leading financial firm.
Nearly a fifth of over 55s wish they had started saving more and earlier to finance a comfortable retirement, according to the report from Standard Life.
Instead, they blame running up huge debts on credit cards, store cards and loans as the main reason for not saving enough for their later years.
Many also chastise themselves for spending on luxuries and nights out rather than keeping the cash in the bank.
Five financial regrets
The financial firm listed the five biggest financial regrets of the over 55s:
- 18% wished they had started saving when they were younger
- 16% say they should not have borrowed so much money
- 6% felt budgeting their money better would have given them a better retirement income
- 5% regret spending on nights out and luxuries instead of saving
- 5% would like to have taken better advantage of tax-incentives like ISAs
The firm suggests younger generations should take a lead from the regrets of the over 55s and start saving.
Enrolling in a workplace pension scheme is a good start, says the firm’s Julie Hutchison, as is saving in an ISA.
Both provide tax breaks that add value to savings at no cost to the saver.
“This research is a clarion call to young savers not to make the same mistakes as their parents,” said Hutchinson. “Saving even small sums earlier in life pays off later because of the way compound interest works.”
Managing money better
She also pointed out that many over 55s have to stop saving to pay for children to go to university or parents to go into long-term care, and that late in life savings gap can cause those approaching retirement themselves a real financial problem.
“We should all start putting money aside for retirement earlier so we do not regret spending what we earned when we are older.,” said Hutchinson. “The real lesson is however old you are, you only earn your money once and when it’s gone, it’s harder to replace.”
The study did reveal 10% of youngsters plan to start a personal pension this year and 20% want to enrol in a workplace pension.
“People are managing their money better and because credit is harder to come by, less are running up large borrowings,” said Hutchinson.
