According to new research conducted for Prudential, UK pensioners are failing to budget for life in retirement, with many spending considerably more in year one than in subsequent years, only to regret their splurge as the reality of living on a pension bites.
The study found more than one in four (29%) pensioners admit to spending more in their first year of retirement, on average splashing out £8,000 more than in subsequent years.
The research also found that 19% of those who had spent more in the first year of their retirement regretted doing so and only around a third (32%) of retired UK adults said they set a retirement budget. More than a third (34%) said they just played it by ear and a mere 17% saw a financial adviser for advice on living on their pension savings.
Despite this, the study conducted among retired UK adults, found that 63% said they felt they had planned their finances adequately before retiring.
Gary Shaughnessy, Prudential Managing Director Retail Life & Pensions, said: “It is quite worrying to see the lack of planning people undertake as they approach retirement and it’s particularly surprising to see how few of today’s pensioners sought financial advice. Seeing a financial adviser should be a baseline activity for everyone planning their retirement so that they structure their finances to maximise retirement income from all available sources, including pensions, savings and investments and equity in their homes, if necessary.”
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Notes to editors:
Study conducted among 4,051 UK adults of whom 726 were retired with a private or company pension.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4,051 adults. Fieldwork was undertaken between 2nd - 6th May 2008. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
Established in 1848, today Prudential plc is an international financial services company with a product range which extends from personal banking, insurance, pensions and retail investments, to institutional fund management and property investments.
In the UK Prudential is a leading life and pensions provider with around seven million customers.
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