We’ve recently conducted some research to understand how people are feeling about the budget. Our research shows that awareness about the retirement changes announced in this year’s Budget is high, with 80% of people saying they have some level of knowledge of them. In the 2014 Budget, the government announced it planned to give people more freedom in how they take their retirement savings, and from April 2015 people aged over 55 will be able to take their defined contribution pension savings as they want, subject to their marginal rate of income tax. If you’d like to know more about these changes and how they might affect you click here.
Running out of money is a concern
52% told us that they think people can be trusted to spend their retirement savings wisely. And there is strong support for having control over their finances (63%), which will allow them greater freedom to do what they want with their money (67%).
However, 22% say they do not feel their retirement income will last for the whole of their lifetime, and 42% say it will last while they are still active. Men are much more likely than women to be confident that their money will last their lifetime (41% vs. 27%).
Family and friends are top for guidance
62% of pre-retired Brits say they think giving people more choice and flexibility in how they take their retirement income is a good idea but some support is needed.
When it comes to guidance and support on their retirement plans, 45% of people say they turn to friends and family. Pension providers also rank highly (33%) together with independent financial advisers (28%) and the Pensions Advisory Service (24%).
While 28% of people say they have enough knowledge to be able to make the right decisions about their retirement, 41% say that although they have some knowledge they would benefit from further help, and 30% admit they are lacking in their understanding.
Clive Bolton, Aviva’s managing director, retirement solutions, said:
“It’s good to see that people support the government’s changes to retirement income, and are confident about the opportunities that increased flexibility and choice will bring them. It’s clear that people will need support and guidance as they choose how to make the most of their savings, particularly as many are concerned about running out of money over what could be a long and varied retirement. With additional flexibility, people are increasingly likely to adjust or change their retirement income decisions as their needs evolve over the retirement years. Having access to a range of robust solutions that suit different needs, as Aviva offers, will be important. Retirement solutions such as pensions, annuities, income drawdown and equity release will continue to have a role to play in people’s retirement plans.”
Research conducted by ICM Research on behalf of Aviva in March 2014, with a sample of approximately 1,500 people aged over 18 years who are yet to retire.