With the recession in full swing, many people have been forced to re-think their long term financial plans. State pensions are no longer guarantees of a comfortable retirement – as the worldwide economic situation worsens, the price of fuel, utilities and even basics such as food and clothing are rocketing, leading to many retirees finding their pension plans are no longer able to stretch far enough to cover basic living costs.
However, a study released this week has revealed that one in ten British commercial property workers are evading the worries of finances in later life by simply never planning to retire.
Investment firm Baring Asset Management questioned 1,500 British workers about their financial futures and current pension plans, ahead of the Government’s plan to automatically enter up to 10 million people into workplace pensions. The scheme, which is designed to tackle the pensions and savings crisis rapidly becoming a huge problem in the UK, will launch in October, affecting millions of workers in larger companies agreeing to pilot the idea.
The study revealed that almost two fifths of participants had no idea when they would be able to retire, with a further twelve per cent doubting their financial stability would ever allow them to give up working at all.
Additionally, in the group approaching the current retirement age, made up of workers aged between 55 and 64, uncertainty about the future seemed to be on the rise. 44 per cent – or, to put it another way, the equivalent of 2.1 million UK citizens – admitted that they have no idea when they will be able to afford to retire.
This is a rise of 14 per cent in a single year, as last year only 30 per cent of participants admitted to feeling uncertain about their retirement plans.
Chief investment officer at Baring Asset Management, Marino Valensise, showed concern about this very real problem when discussing the results.
He said; “For a worryingly large proportion of the British population, retirement is very uncertain.
“A significant number cannot afford to retire, owing to a combination of increasing longevity, a decline in the value of annuities and a lack of pension savings. The auto enrolment scheme may go some way to addressing this problem and it will be interesting to see how this impacts the results of our survey next year.”
The survey also revealed that many commercial property workers are worryingly naïve when it comes to planning for the future financially. 30 per cent of workers in the 55-64 group had no pension plans at all, a rise of four per cent from last year. Furthermore, one in three participants aged between 35 and 44 are yet to start putting money aside to see them through their retirement.
But Mr Valensise insists that those nearing the age where they become eligible for a state pension have been revealed as the most vulnerable by the survey, as the recent financial turmoil may have ensured they will have to work far longer than they intended.
He concluded; “Particularly concerning is the fact that such a huge proportion of people aged 55 to 64 do not know when they will be able to retire.
“It is likely that these people will have suffered pension losses in recent years due to the financial crisis and therefore need to work longer to recoup funds.”
Do you believe that mandatory workplace pensions are the best way to ensure commercial property workers have the financial stability to allow them to retire? Do you already have a pension plan in place to allow you to retire and, if so, do you believe that the peace of mind is worth the amount taken from your pay every month?
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