Retirement news

Banking on the inheritance

3 July, 2007

Despite the mistakes that their parents and grandparents have made which sees a large proportion of today’s retirees struggling on low incomes because they didn’t put enough aside when they were working, today’s younger generation of workers are blinkered to the fact that saving too little will cost them dearly when they get older.

‘Nearer the time’ is definitely the catchphrase most suited to today’s twenty-somethings. A large proportion are relying solely on inheritance to plug this gap. This is a stark contrast to the number of over-55 year olds who today concede that they will have to work part time to supplement their pension fund, whilst a quarter are looking to make up for their pension shortfall by releasing equity from their homes.

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Kirsty Macpherson, spokesperson for retirement specialist Tomorrow commented: “Our research has revealed that despite warnings from the Government over the pensions gap and the plan to raise the state retirement age, the UK’s twenty-somethings are still not aware of the dangers of planning too late for their retirement.

“With the young not learning from the mistakes of the older generations and not making adequate preparations for their retirement, the current pensions crisis looks set too continue indefinitely.

“If younger generations were to give more consideration to their future needs they could easily avoid an uncomfortable retirement. It is also clear from the research that those reaching retirement would benefit from professional financial advice in order to maximise their income.

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“There are often many options left open to people which are not considered, for example many people are not aware that they are able to increase the income they receive from an annuity because of bad health or lifestyle choices; equity release is also a viable option for many but is often not known to the retiree.”