According to new research from MGM Advantage, while the top priority for six out of ten adults (58%) is the freedom to live their retirement to the full or have financial security, the reality is often very different.
Almost four million retired people (37%) have scaled back on their daily expenditure and around 500,000 have returned to some form of employment or started a new career during their ‘retirement’.
Of greater concern are the 265,000 retired people who have made requests for financial assistance and some 725,000 retirees who regularly rely upon credit in retirement, warns MGM Advantage. Both of these are up significantly on last year’s figures, with 119,000 people requesting financial assistance from relatives and 486,000 relying on credit in 2010.
MGM Advantage has calculated that with the annual CPI inflation rate at 4.5%, UK households will collectively need to find an extra £40 billion (£39.75 billion) to maintain the standard of living enjoyed 12 months ago. For households where the main occupant is aged 65 -74, the corresponding figure is £3.16 billion and where they are aged 75 and over, it is £2.47 billion.
Craig Fazzini-Jones, director at MGM Advantage commented: “It’s tragic that so many people’s retirement dreams fail to come to fruition, often because consumers lack understanding about their options or are unaware of some simple, easy steps that they can take to boost their retirement income by shopping around for the best annuity rate.
“The pressures facing retirees have increased significantly over the last six months as the rising cost of living continues to erode their disposable income. So it is essential they make their pension fund work as hard as possible by making the best decision on how they turn their fund into a retirement income.”
Recent research from MGM Advantage also revealed that more than half (54%) of non-retired UK adults are ‘not at all prepared’ for retirement, an increase of more than three million people than last year. It warns that fewer people are seeking independent advice than they were three years ago (14% in 2011 compared to 16% in 2009), but that they are also almost three times less likely (3%) to talk to a friend for advice than they were in 2009 (9%).
