The cost of retirement

2. Current household

Almost half (48%) had a two-person household.

88% of people lived with their partner while 36% lived with a child or children.

The average number of children was two as was the average number of grandchildren.

Of those asked, 56% lived in their own home without a mortgage. The average property price was £276,286.

3. Priorities for retirement

Holidays feature strongly for all, but those retired find gardening, socialising with friends and family to be top priorities.

More than half of those both retired and not yet retired were prioritising travel and holidays.

56% of those retired said gardening came second.

What are your priorities in life now you are retired / What are you looking forward to doing when you retire?

Retired / Not retired

Travel / holidays 58% retired. 59% not retired

58%

59%

---

Gardening 56% retired. 40% not retired

56%

40%

---

Spending more time with my friends 46% retired. 44% not retired

46%

44%

---

Seeing more of my children / grandchildren 49% retired. 40% not retired

49%

40%

---

Focusing on my existing hobbies 37% retired. 39% not retired

37%

39%

---

Do more exercise / more sport / walking 27% retired. 31% not retired

27%

31%

---

Helping my children / grandchildren financially 26% retired. 23% not retired

26%

23%

---

Do voluntary work 17% retired. 20% not retired

17%

20%

---

Go to the theatre / art exhibitions more 18% retired. 18% not retired

18%

18%

---

Starting a new hobby 7% retired. 22% not retired

7%

22%

---

Learn a new foreign language 6% retired. 10% not retired

6%

10%

---

Start a new business or enterprise to earn money 2% retired. 10% not retired

2%

10%

---

Focusing on my health 1% retired. 0% not retired

1%

---

Something else 4% retired. 2% not retired

4%

2%

Amongst those who have already retired 4 in 5 say that life has got better since they retired.

Amongst those who have retired ‘having more time’ is an important reason for why life has become better.

Less stress, more time to spend with my family and friends, pursue my hobbies and relax & listen to my favourite music

More me time for holidays etc. More time to spend with my husband and family. Chances to go walking and spend time in nature

Much more relaxed. Enjoying live and not have the stress of a 2.5 hour daily commute

Spending habits

Since retiring, 41% of people have changed their spending habits.

The biggest areas where people spent less since retiring

Fuel 38%

38%

---

Clothes 37%

37%

---

Holidays 31%

31%

---

Travel or transport (e.g. Train or bus) 22%

22%

---

Days / Nights out 21%

21%

---

Takeaways 20%

20%

---

Weekly shop 19%

19%

---

Public entertainment (going to concerts / cinemas / theatre) 14%

14%

---

Alcohol 12%

12%

---

Beauty treatments 10%

10%

Spend on grandchildren, children and home improvements has also risen.

Perceptions

Almost 4 in 10 miss working, but the majority seem happy to have left it behind.

For those who did miss it, memories, social interaction, and a sense of purpose were reasons given.

I miss driving the truck, but I didn't realise that until I'd been retired for 7+ years

I have no family, so my work colleagues were like family to me. We had worked together for years

Whilst most think they retired at the right time, 18% said they retired too early.

• The average age for retirement was 59
• For those who weren’t retired, the average preferred retirement age was 64

4. Financial income: expectations vs reality

People who were retired had around £100 more in disposable income per month than those not yet retired, despite lower monthly incomes.

Household monthly net income (mean average £)

Retired / Not retired

Retired - £2,114

£2,114

---

Not retired - £2,375

£2,375

Household monthly disposable income (mean average £)

Retired / Not retired

Retired - £617

£617

---

Not retired - £525

£525

State or private pensions are the top sources of income for those retired.

Savings and investments also supplement income in retirement.

71% have the same standard of living as they did before retiring though 1 in 10 have seen a fall.

Three quarters have a private pension, and have almost £150,000 saved in it, on average.

A quarter of people hadn’t given any thought to financing their retirement.

75% of people approaching retirement said they were expecting the state to finance their retirement.

Those approaching retirement had mixed expectations about their standard of living in the coming years.

Did people expect to have the same standard of living as they have now

40%

40% of people expected to have the same standard of living as they have now

33%

33% of people expected to have a worse standard of living than they have now

14%

14% of people expect to have a better standard of living than they have now

13%

13% of people didn't know what standard of living to expect

A third were worried about leaving their job when they retire.

Two thirds of people approaching retirement say they were confident about their ability to manage their finances during retirement.

How confident did people feel about managing their finances during retirement?

Very confident / Quite confident / Not very confident / Not at all confident / Don't know

Retired

41% of people are very confident

41%

49% of people are quite confident

49%

5% of people are not very confident

5%

2% of people are not at all confident

2%

2% of people are unsure

2%

---

Not retired

16% of people are very confident

16%

52% of people are quite confident

52%

20% of people are not very confident

20%

7% of people are not at all confident

7%

5% of people are unsure

5%

Most talk about money to some extent with their spouses or partners, but around two thirds know exactly how much their partner earns.

Among those people who are retired, 24% say they budget more than before they retired.

5. Financial concerns or worries

Worries differ between people who have retired and those approaching it.

Those retired worried more about long term care, whereas those approaching retirement worried more about rising living costs and running out of money.

What is the biggest financial concern or worry?

Retired / Not retired

The rising cost of living 21% retired. 25% not retired

21%

25%

---

Running out of money 9% retired. 27% not retired

9%

27%

---

Paying for long term care 20% retired. 9% not retired

20%

9%

---

Falling value of pensions 5% retired. 10% not retired

5%

10%

---

Not being able to leave money to my loved ones when I die 4% retired. 5% not retired

4%

5%

---

Not being able to help younger family members 3% retired. 4% not retired

3%

4%

---

Increase in tax 4% retired. 2% not retired

4%

2%

---

Stock market crash 5% retired. 1% not retired

5%

1%

---

House prices falling 1% retired. 2% not retired

1%

2%

---

Low interest rates 1% retired. 0% not retired

1%

---

Something else 1% retired. 1% not retired

1%

1%

---

Nothing - no financial worries 26% retired. 14% not retired

26%

14%

Amongst those who are retired most (80%) say they have enough money to do what they want to do.

Just over half of those approaching retirement think they have enough money to do what they want to do.

6. Financial regrets and advice

The biggest regrets for those approaching retirement is not saving more and not starting a pension sooner.

Top financial regrets

Retired / Not retired

Not saving more 26% retired. 51% not retired

26%

51%

---

Not starting a pension sooner 22% retired. 37% not retired

22%

37%

---

Frittering away money on small things 13% retired. 26% not retired

13%

26%

---

Poor investment decisions 8% retired. 10% not retired

8%

10%

---

Giving too much money away to my family 7% retired. 6% not retired

7%

6%

---

Spending too much money on big ticket items 5% retired. 6% not retired

5%

6%

---

Not getting financial advice 3% retired. 7% not retired

3%

7%

---

Not working in a better paid job 0% retired. 1% not retired

1%

---

Divorce 1% retired. 0% not retired

1%

---

Something else 1% retired. 1% not retired

1%

1%

---

None - no financial regrets 51% retired. 24% not retired

51%

24%

Around half of all over 50s wished they had done something different to prepare for the financial cost of retirement.

Mentions included saving more, setting up a pension earlier.

Consulted a financial adviser in my twenties

Changed my lifestyle and joined a personal pension instead of just a company pension scheme

Saved more into my workplace pension instead of spending it on holidays etc.

“Starting to save early” is one of the main pieces of advice for younger generations.

Other suggestions included budgeting carefully and paying regularly into a pension.

Start saving or investing in safe, reliable products immediately after starting work. Invest a tiny percentage but increase this every year or at every wage/income increase. By retirement the investments will be substantial

Join a credit union to save a little and often

7. Health

9 in 10 of those retired said they now have more time to do the things they like to do.

In general, those who are retired are happier with life now they have retired.

Long term care

Paying for support and long-term care is a worry for many.

End of life planning

7 in 10 of those retired already have a will, and a quarter have a power of attorney – those not yet retired are much more likely to have neither.

Of those with a will, most have informed the person who they would like to be their executor.

Around half of people without a power of attorney said they would consider putting one in place.

Many have not yet made any plans for their funeral.

(Only) a third of those who are retired have made any plans for their funeral – even less of those approaching retirement have done so.

Of those who have made plans, around half expect to use a pre-paid funeral plan to pay for their funeral.

Others plan to use existing savings and investments or an over 50s life insurance policy.

How will people pay for their funeral

Retired / Not retired

Pre-paid funeral plan 54% retired. 49% not retired

54%

49%

---

Through existing savings and investments 29% retired. 27% not retired

29%

27%

---

Over 50s life insurance 21% retired. 34% not retired

21%

34%

---

Other life insurance policies 1% retired. 2% not retired

1%

2%

---

By dontaing my body to medical science 1% retired. 1% not retired

1%

1%

---

Some other way 3% retired. 2% not retired

3%

2%

---

Dont know / not thought about it 0% retired. 3% not retired

3%

8. Top tips for retirement

A range of practical hints and tips were given by those who are retired to help others prepare for retirement:

• Enjoy retirement
  80% said that life has become better since they retired. They have more time and the freedom to do what they want.
• Start saving from a young age
  Save money when you can, and try not to ‘fritter money away’ on small things. Average net monthly income amongst those who are retired is £2,114 and around 8 in 10 are hopeful that they have enough money to last their retirement.
• Don’t retire too early
  The average age of retirement was 59, and although 76% felt they retired at the right time one in five (18%) said they retired too early. Few felt they retired too late.
• Plan for the future
  Paying for support and long-term care is a worry for many, particularly if their partner needed long-term residential care. Only 9% of those who are retired felt they could definitely afford this.
• End of life planning
  Many have not yet planned their funeral yet. Of those who are retired only 36% have made any plans for their funeral.