Retirees say financial planning should start at age 31

Retirees believe serious financial planning for retirement should now start at the age of 31, on average, according to new research.

The study of 1,000 UK retirees aged 67 and over found two thirds of respondents (66%) believe people should begin financial planning between the ages of 16 and 34, with four in ten (40%) reporting that the rising cost of living had changed the retirement lifestyle they had expected to have. Among these:

• 60% have cut back on heating or energy use

• 58% are eating or drinking out less

• 53% have taken fewer holidays

• 49% have cut back on days out

• 37% are using discounts, deals, offers or memberships more frequently

The research, commissioned by Boundless, found retirement costs have taken some by surprise, with almost a third (32%) saying it had turned out to be more expensive than they expected. The most underestimated costs for these retirees are energy bills (88%), food and groceries (85%) and council tax (62%), while more than a third (36%) said days out and leisure activities had cost more than they expected.

Darren Milton at Boundless, the membership club for working and retired public sector and civil service workers, said: “Retirement can feel a long way off for people who are balancing today’s bills and responsibilities, but the message from those who have already retired is clear: starting to think about it earlier can create more choices later.

“Planning should go beyond pensions and savings. Thinking about how you want to spend your time, the experiences you want to enjoy and what those things might cost can help you prepare for a more fulfilling retirement.”

The cost of delayed planning

Looking back, four in ten (40%) retirees believe they could have retired an average of 4.4 years earlier if they had made different financial decisions.

Among these, more than half (53%) said paying more into their pension could have helped them retire earlier, while 45% pointed to saving more regularly and 39% to starting a pension sooner.

Personal finance expert Lynn Beattie, known as Mrs Mummypenny, said: “It's striking that so many retirees believe they could have retired almost five years earlier if they'd made different choices with their money. Retirement has been more expensive than planned in many cases, with luxuries being sacrificed to pay for rising essential bills. 

“The good news is it's never too late to improve your financial future. Small changes like increasing pension contributions and reducing unnecessary spending can compound into significant benefits and help people enjoy greater freedom and security later in life.”

More than half of respondents (53%) admitted they had spent little or no time planning how they would fund their retirement before leaving work, while six in ten (59%) had spent little or no time planning how they would spend their time.

Almost a third (32%) reported seeing fewer people day-to-day as the hardest aspect of retirement to adjust to, followed by having less disposable income (29%) and losing the routine of work (2%).

To find out more, please visit www.boundless.co.uk.