According to the recent Real Retirement Report from Aviva, a global life insurance company based in London, the average savings of people 55 and over have declined from about £15k a year ago to £11k as of now, a drop of about 27% overall.
Chiefly because of the tough financial times, a lot of people have been forced them to dip into savings just to stay afloat. Aviva’s report was based on interviews with 12,000 UK adults over 55, and their conclusions were that a large percentage of adults at,or nearing retirement age, have inadequate resources to see them through retirement.
Clive Bolton, a specialist in retirement planning at Aviva, observed that many people simply don’t have the funds to invest in savings, but he noted that another problem is the attitude many of them have about saving in general. He said a lot of people associate saving with stinginess, when they should look at it as a gift to themselves, their families and/or society.
The Real Retirement Report found that more than a third of those interviewed did not even begin to think about eventual retirement until they were 50 or older, and almost two-thirds of them expected to be working past the traditional retirement age. Since the recent abolition of the Default Retirement Age, many are assuming they will continue to work, and about a third indicated they would keep the same job if they could. Almost a quarter of them said they would prefer to keep on working.
Planning and saving is crucial, says Bolton, and it’s not enough to think vaguely about selling up and moving to a cottage in some rural community that may or may not be less expensive than where they have been living. People nearing retirement age also need to consider the health issue; with the best will in the world, no one can continue to work productively if their health fails, so that factor must be taken into account.
The UK financial comparison site which4U offers information and options to help anyone trying to plan ahead for retirement. Currently, the Bank of Ireland has the most competitive long-term fixed rate cash ISA, with a five-year term at 4.5%. Vanquis and Birmingham Midshires has the best five-year fixed rate bond at 4.65% AER.
The site also offers a range of growth and investment possibilities, such as a six-year growth ISA that offers a fixed 12% annual income with all capital protected, or a five-year bond that’s linked to inflation and promises a minimum of 17.5% return or the RPI measure of inflation, whichever is greater.
The experts strongly suggest that now is the time to start thinking about and planning for retirement, even for those who are many years away from the actuality. It is never too soon, but it may very well be too late if left until some point in the uncertain future.