DIVERSE AVENUES THROUGH WHICH INDIVIDUALS PLAN TO SUPPLEMENT THEIR RETIREMENT INCOME

Recent research reveals that a significant proportion of individuals over 50 years old anticipate relying on secure income sources, such as Defined Benefit (DB) pensions, for their retirement funding [1].

However, the State Pension emerges as the most pivotal component of retirement planning, with three-quarters (73%) of this demographic identifying it as their primary income source. This data underscores the State Pension’s integral role in the financial security of retirees.

TRANSITIONING PENSION LANDSCAPES

The study further elucidates the shifting dynamics of retirement income, indicating a gradual decline in the accessibility of DB pensions across successive age groups.

Specifically, individuals over 80 and 70 years old rely more on DB pensions than their younger counterparts in their 60s and 50s. This trend highlights the evolving nature of pension schemes and the increasing need for diversified retirement planning strategies.

DIVERSE SOURCES OF RETIREMENT INCOME

Moreover, the research sheds light on the diverse avenues through which individuals over 50 plan to supplement their retirement income. While DB pensions contribute significantly to the retirement funds of older retirees, other sources such as general savings, investments and Defined Contribution (DC) workplace pensions also play crucial roles.

The findings reveal the average contributions of these various income sources to retirees’ overall financial landscape, illustrating the multifaceted approach to retirement funding in today’s context.

EXPLORING ALTERNATIVE INCOME STREAMS

In addition to traditional pension plans and savings, the study points to alternative strategies retirees employ to finance their post-work lives. Notably, some individuals over 50 leverage assets such as investment properties and expect financial support from family members to bolster their retirement income.

These findings underscore the creative solutions that retirees are adopting in response to the diminishing prevalence of guaranteed DB pensions.

///CONTINUE READING THIS BLOG ON PAGE 32-33 (CLICK HERE)///

Source data:

[1] The research was commissioned by Standard Life and conducted by Opinium, with a nationally representative sample of 2000 over 50 years old, between 6th- 14th March 2023.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

DIVORCE PLANNING IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.