HNW Individuals Unprepared For Retirement – Arbuthnot Latham

Amanda Cheesley Deputy Editor 12 April 2024

HNW Individuals Unprepared For Retirement – Arbuthnot Latham

The London-based private and commercial bank, has just released new research looking at retirement planning of high net worth individuals. It reveals significant gaps in people’s overall understanding of whether their pension savings will support a comfortable retirement.

New research from Arbuthnot Latham has revealed a retirement blind spot, with only 61 per cent of those surveyed knowing how much their pension pot is worth, despite also believing that the savings' sum required for financial peace of mind is £900,000 ($1,141,000).

The proportion of those aware of their savings is larger in the high net wealth category – those with £500,000 or more in investable assets – at 71 per cent, compared with only 54 per cent of those in the lower net wealth category (£100,000 – £499,000).

Arbuthnot Latham partnered with Atomik Research, an independent market research agency, to survey more than 500 UK residents with a net worth of at least £100,000, which took place between 30 November and 5 December 2023. Sixty per cent of respondents have a net worth (excluding property assets) of between £100,000 and £499,000, and 40 per cent have at least £500,000.

The survey also reveals that women are less familiar with their pension pots than men on average, with nearly four in 10 women reporting that they are unaware of the value of their savings, compared with 26 per cent of male respondents.

There is also a gender gap in how much men and women think they will need in retirement, with the male average standing at £934,957 and the female average at £829,109.

Although respondents believe that they could finish work in their early 60s, with 62 being the average age of when they expect to retire, they are less certain about whether their pension savings will be sufficient to sustain their lifestyle, the survey shows.

Eighty per cent said they would still be able to achieve their retirement age given the current financial outlook, but 20 per cent report that they will miss their target retirement age based on the current financial outlook.

Younger savers are also more optimistic, with 55 per cent of those under 35 believing that their pension will enable a comfortable retirement, compared with just 24 per cent of those aged 45 to 54.

“The people we spoke to said £900,000 of pension savings would be enough to give them financial peace of mind. However, this figure will be difficult to maintain in retirement without careful planning,” Eren Osman, managing director, wealth management, said.

“While it is a significant sum, inflation can erode the value of your pension pot over time; sustained growth is crucial in your portfolio,” Osman added.

“Saving for retirement is the bedrock of a financial plan, but our research reveals significant gaps in people’s overall understanding of whether their pension savings will support a comfortable retirement, meaning many will miss their target retirement age or may be forced to downgrade their lifestyle expectations,” he said.

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