A survey of 6,000 people aged between 18 to 80 revealed stark differences in attitudes towards planning for retirement.
Standard Life’s Retirement Voice survey revealed an insight into the nation’s retirement attitudes and the impact that ongoing economic uncertainty has on retirement plans.
It was surprising to learn that of the people surveyed, just 3 in 10 said they were doing “a great deal” of planning for retirement. Predictably, households with income over £100,000 were the most likely to fall into this category, but even in those instances the proportion was no more than half (48%).
Perhaps it can be said that the cost-of-living crisis is driving more people to focus on their short-term spending, rather than their plans for the future. However, across all income levels the findings from the survey are clear – the more financial planning you do, the more comfortable you are likely to feel.
Generation X are not planning for retirement
The results from this survey revealed some interesting divisions in attitudes across generations. The smallest share of those who said they had “done a great deal” of planning for their retirement was Generation X at just 21%. This was fewer than the two younger generations of Millennials and Gen Z.
It’s vital for more members of Generation X to prioritise their retirement planning. More than half of today’s retirees wish they had thought about retirement finances at a younger age or started saving earlier. Overall, there are more retirees (43%) who wished they had sought financial advice or guidance to plan for their retirement, than are happy with the decisions they ultimately made (39%).
Start planning for retirement early
The survey also found that people tend to start taking a keener interest in their retirement planning at the average age of 36. Although that figure seems to hide a large generational difference. Of those surveyed, Baby Boomers confirmed they typically start retirement planning at age 49, while for Gen Z it was age 20.
It was encouraging to see the younger generation begin their planning for retirement at an earlier age, compared to the older generations before them. This is perhaps driven by a combination of auto-enrolment pensions, an increase in digital saving apps and a greater level of financial education through social media. One of the keys to a successful and fulfilling retirement is to start saving as early as you can, perhaps a habit we can learn from Gen Z.
Benefits of financial planning
The benefits of financial planning were evident in responses to the survey question: “How do you feel about your current financial situation?” Those who had done “a great deal of planning” were nearly three times more likely to feel positive about their finances than those with no planning (61% vs. 21%). When it comes to rising interest rates, those who planned were less likely to feel worried than those who did not (59% vs 41%). This was a similar picture for feelings on inflation, utility bills and economic uncertainty.
A professional financial planner can work closely with you to create an agile plan based on your personal goals and lifestyle. This can help you to balance your focus on the long-term when planning for your retirement, as well as assess your shorter-term financial needs. A trusted financial planner can also be there to offer guidance and reassurance for times when you may be feeling anxious about the economic landscape.
If you would like to speak to our team of financial planners to discuss your plan for retirement, please do get in touch today.