The Friends Provident research, Visions of Britain 2020, Ageing and Retirement, shows that as life expectancy continues its upward trajectory, people will continue to fund their retirement through a number of different vehicles including savings, state pensions, employer pensions, shares and an extended working life.
Despite the fact that a house is usually considered to be the largest asset that most retired individuals have, 77% of retired Britons wish to remain in their home and do not want to fund their retirement through equity release or downsizing their property.
Commenting, Martin Palmer, head of corporate pensions marketing, said: “There is no doubt people still see their house as an investment, however, it is important to make the distinction between people appreciating the value of their house and actually planning to use it as an asset. It is also evident that the desire to stay in one’s home increases as people get older while the intention to downsize declines.
"Our research has revealed that currently only 11% of those we spoke to plan on selling or downsizing their property to fund retirement and an even smaller proportion - 6% - plan on releasing the equity in their property. However, with increased longevity and the decline of final salary schemes, it is clear that in the future many people will need to consider how they can realise some of the value from their house; as a result we believe that equity release schemes will become significantly more commonplace in the future.”
Over one-third (37%) of workers stated that they have a company pension scheme, but less than 40% of the sample felt that employer schemes were better than private schemes.
Commenting, Trevor Matthews, CEO Friends Provident Holdings (UK) said, "As individuals we now have more choices, but coupled with this comes increased responsibility and the need to plan adequately for our own retirement.
“It is crucial that we do this planning early enough in life whilst we have more options available to us rather than waiting until we reach our mid 60s when the only stark choices might be to keep working into our 70s or accept a lower than expected standard of living in retirement.
“As part of this planning, it is important to consider whether we are still on target to be able to retire when we want to or whether we need to take some further action and indeed whether our aspirations for our life in retirement have changed."
Over half (51 %) of respondents stated they wish to continue working after they reach the retirement age as a way of staying active. This dynamic ageing population is creating a demand within the British workforce for alternative ways to fund retirement.
Moreover, 47% of respondents fear that they will get bored when they stop working with 43% stating that they enjoy the social contact that comes from being in a working environment.
Surprisingly, despite the fact that the amount that people inherit, on average, has increased by 80% in the last 11 years (at real 2008 prices), less than one in five retired people think that it's their responsibility to leave an inheritance to their children. Instead retired people expect to help their children with education and housing costs. Moreover, 26% of grandparents stated that they expect to contribute to the cost of tertiary education.
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