Retirement Planning: Study Shows People Spend More Time Choosing a Car

Most of us think about what we’re going to do when we retire. Some dream of a cottage in the countryside, others imagine travel and adventure. Whatever your particular fantasy, they all have one thing in common: they cost money.

We’re often forced to think about our financial futures the first time we join a company and start paying into a pension. It is quite surprising to discover, therefore that, according to a study by Legal & General, workers nearing retirement often spend more time choosing a new car than deciding how to use their pension.

Further findings show even more worrying statistics: one in five of these workers is not even confident that his or her pension pot will last them through old age. The report found 32% of people over 55 spend less than a week deciding on pension income arrangements and researching their best options.

However, when asked how long they would spend choosing a new car, 40% of the 2,000 people asked responded that they would consider the matter for over a week. This seems particularly contradictory when you consider that over half of those surveyed claim they see financial security as their “top priority” in retirement.

The survey also states that “few knew the actual rate of return they could get as income in retirement and nearly a quarter (23%) did not know what interest rate represented good value for money on their investments or savings” and that “nearly three in five (58%) of the older workers yet to access their pension had not yet begun researching their options.”

Due to the introduction of pension freedoms (allowing people to access their pots earlier), savers must be more pro-active about their money. Emma Byron, of Legal & General Retail Retirement, said, “The flip side of the flexibility offered by pension reform is that we are all now responsible for making sure our pension pots will last through our retirement. But as a nation, we are not spending enough time thinking about this and how we want to use our pension. This is true both before and in retirement.

“Planning retirement is a challenge and maybe not as much fun as buying a car or remodelling our bathroom, but it is important. We need to spend time on this vital task or we run the risk of not having enough money to last, or our investments not giving us the return we want.”

If you want help taking charge of your pension and your future security get in touch with us today at enquiries@gpfm.co.uk or call 01992 500 261 now and see how we can help address your financial future.

This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.

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gpfm are an independent financial planning company dedicated to the provision of personal, professional and objective-driven advice for our clients. We have been awarded the Chartered Financial Planners title by the Chartered Insurance Institute for offering high quality, independent and informed advice that meets the needs of our clients.