Many approaching retirement are in for a rude awakening. A significant portion haven’t considered the harsh truth: their savings might not last. This could leave them scrambling financially in their golden years.

A Glaring Problem

A report published in IFA Magazine found a worrying 68% of Brits have not thought about how many years of retirement they need to fund. This means potential shortfalls due to inadequate savings or overspending early on.

Retirement Reality Check: You Might Be in for the Long Haul

People planning for retirement often underestimate how long they’ll actually be retired. The survey shows most expect to retire in their late 60s. But based on data from the Office for National Statistics (ONS), that could be just the beginning.
The average 65-year-old man can expect to live to 85, while women of the same age might reach 87. And with lifespans on the rise, younger retirees could be looking at an even longer stretch without a paycheck.
Here’s the catch: planning for an average 20-year retirement might leave you high and dry. A significant portion of 65-year-olds (25%) are expected to live past 92, with 10% reaching 96. Women fare slightly better, but a quarter can still expect to see 94, and 10% might make it to 98.
Simply put, basing your retirement plan on averages could leave you strapped for cash in your later years. Living to 100 isn’t unheard of these days, and to achieve financial security and avoid scrambling later, you need to consider a potentially much longer retirement.
With retirements potentially spanning decades, ignoring longevity is a gamble you might lose.

The Challenge of Sustainable Income

Consider these sobering realities:
  • Longevity on the Rise: Younger generations may retire even earlier, stretching their retirement funds even thinner.
  • The Unknown Income Stream: It’s difficult to predict your exact income needs throughout retirement, as expenses may fluctuate.
  • Potential Future Burdens: Factor in potential future expenses like changing lifestyles, long-term care, or supporting loved ones.
  • The Inflation Threat: Inflation can significantly impact your ability to afford basic necessities and discretionary spending.
Take a look at the Bank of England’s inflation calculator. It’s a wake-up call. Even with a modest average inflation rate of 2.8% like we saw between 2003 and 2023, you’d need a significant income increase just to stay afloat.
Imagine retiring in 2003 with a comfortable £30,000 income. By 2023, that same income would only provide the purchasing power of roughly £52,000. That’s a hefty chunk of extra income you wouldn’t have if you didn’t factor in inflation.


A Retirement Plan: Your Lifeline

We understand that everyone’s retirement picture is unique. Our financial advisers can work with you to explore various income options and assess which best suits your situation.
  • Income Options: Not a One-Size-Fits-All: Annuities offer guaranteed lifetime income, while flexible options allow adjustments based on your needs.
  • Risk Management: Don’t Be Caught Off Guard: Address concerns like your partner’s financial security if you pass away or market volatility impacting your investments.
  • Peace of Mind, Not False Cheer: A solid plan reduces anxiety about running out of money in your later years.

Don’t Let Retirement Be a Financial Nightmare

Planning for retirement can be daunting, but a financial adviser can be your guide. They can help you create a realistic long-term plan considering your pension, assets, tax efficiency, and even your wishes in a will.

Contact us today for a no-obligation consultation and take control of your financial future in retirement.


Capital at risk.