Surveys

Affluent Households Feel The Pressure Of Looming Post-Retirement Income – Close Brothers

Natasha Taghavi, Reporter, London, 31 July 2013

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Nearly half (48 per cent) of those in affluent households with an annual household income of at least £70,000 (around $107,000) worry about having a high enough post-retirement income to meet their needs, according to Close Brothers Asset Management’s inaugural Trends in Wealth Report: Road to Retirement.

The report reveals that just one third (33 per cent) of those at retirement or looking to retire in the future are unconcerned about funding their retirement. However, heightened concerns have not yet overcome planning inactivity for many. One in seven affluent employees has yet to make any pension provision. And, on average, these workers do not anticipate beginning to make financial plans for retirement until they are 41 years old. With the average first-time buyer age rising to 37, and living costs such as childcare climbing, setting aside money for retirement is still a costly afterthought for many, the firm said.

Close Brothers said that the state pension is not an irrelevance to the affluent, but it will not support their anticipated retirement lifestyles by itself. Just 3 per cent of respondents are confident that it will provide a high enough income to fund their retirement goals. Equally worrying is the lack of awareness over the potential cost of long-term care in retirement. Just 28 per cent of respondents have considered long-term care costs, and awareness of the issue decreases as respondents get younger.

The report showed that retirement income concerns are increasing the likelihood of even affluent retirees working in some capacity. The number of over 65s in work has already reached 1 million, and these are set to grow in number even further. More than half of employees (52 per cent) who want to retire at some point feel they will need to continue working in some form.

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