Despite numerous research reports indicating a dangerously low percentage of British people are saving enough to fund their desired retirement lifestyle, many savers feel relatively comfortable that their combination of state pension, private or occupational pension, savings and property will see them through.
“I think people like me, middle class people, are generally ok,” said one woman surveyed by Morningstar.co.uk this week. “We own our house, we have some savings and we have two pensions [as a couple].”But others whose pensions were hit hard by the financial crisis in 2008 felt less confident that their savings pots would enable them to retire when they’d hoped, or to enjoy the style of retirement they’d imagined. “It’s taken this long to recover the losses [from 2008] so I can’t retire yet,” said one gentleman.
Whether their expectations match the reality of retirement is another thing altogether however. Vince Smith-Hughes, retirement income expert at Prudential, said the changes to pensions, savings and the rules around taking a retirement income that were announced in the Budget in March are good news but it was important to remember that pension pots are finite – and cash can run out.
“If retirees choose to draw income directly from their pension fund, they need to consider if it’s sustainable to take that level of income over an extended number of years,” he said.
