The UK public are giving alarmingly little thought to their saving plans for retirement according to Franklin Templeton’s second annual Retirement Income Strategies and Expectations (RISE) survey.
The survey reveals that on top of the fact that over a quarter (28 per cent) overall have no retirement plan, this percentage remains high amongst older age groups, closer to retirement. For example, over a fifth (21 per cent) of 45-54 year olds have not yet started a retirement plan, and another 7 per cent feel they don’t need one.
The findings also revealed the positive impact on wellbeing that having a retirement plan can have. The vast majority (68 per cent) of those who have not started a retirement income plan experience some level of stress or anxiety when thinking about their retirement savings.
Interestingly, those with a written retirement plan are more open to staying invested in the market longer term, with 21 per cent of those who have a written retirement plan looking to maintain stock market investments post-retirement and draw an income, compared to just 8 per cent overall.
The RISE findings reveal a clear opportunity for the financial adviser community to address the knowledge gap around retirement saving and help to ease concerns from those who may feel stress and anxiety about their future financial wellbeing. The findings emphasise this point, showing that at present just 14 per cent of the UK public say they currently go to a financial adviser. The wealthy are also shunning advice as, surprisingly, of those with more than £250,000 saved for retirement, only 36 per cent use a financial adviser.
Despite the inertia around seeking professional advice, there is recognition of the value it can bring, with almost half (48 per cent) feeling that a financial adviser is ‘important’ to retirement planning or generating income after retirement (2015: 48 per cent).
Of those not currently working with a financial adviser, 65 per cent say they don’t feel the need, with 30 per cent saying the cost is too high (2015: 31 per cent).
Ian Wilkins, UK Country Head at Franklin Templeton Investments, says: “These findings are concerning on a number of levels, but most worrying is the fact that so few people have given any considered thought to a retirement plan. Whilst most people undoubtedly put time and effort into seeking advice and a clear plan over their mortgage or insurance arrangements, it seems that retirement planning is falling by the wayside for a disturbingly large number of people.
“This brings an opportunity for the financial adviser community to educate the UK public on the value they are able to add in helping people to meet their retirement objectives, whilst taking away a degree of anxiety people might have about their financial wellbeing once they finish work.”
Joel Adams, Founder, LIFT-Financial, says: ”Our industry needs to wake up to the opportunities being presented. Consumers remain confused about their retirement options and how to plan for them. We cannot ignore the fact that a significant group of those approaching retirement have little or no plan in place and a widening knowledge gap is emerging across the UK. Financial advisers have a vital role in helping consumers meet their retirement goals."