Recession-hit retirees delaying plans

Britain’s over 50s are increasingly struggling to maintain the level of savings needed to fund a comfortable retirement lifestyle, with many pushing back their retirement date, according to the State of Retirement Report.

The annual survey, commissioned by LV=, reveals nearly 70% of over 50-year-olds yet to retire are more concerned about their retirement prospects than a year ago.

Alongside the increased number of people experiencing retirement income concerns (ERICs), just 7% of the 1,500 over 50s surveyed have been able to boost their level of long-term savings.

Furthermore, the financial pressure of the recession has forced a fifth of over 50s yet to retire to slash the amount they are setting aside for retirement by an average of £137 a month.

The economic downturn has already significantly dented older worker's retirement plans. Around two million people claim to have put back their retirement date due to the recession, while a quarter say they have no idea when they will be able to give up their job.

Around seven out of ten ERICs' primary concern is the cost of food and utility bills, with over 60% worried about how little their savings may grow due to low interest rates and half anxious about the reduced income their retirement savings will buy them.

The report also reveals less than a third of over 50s have a clear idea of the value of their pension pot, with only a quarter claiming to know how much their retirement savings are worth.

A quarter of over 50s expect to rely solely on the basic state pension in retirement and this rises to a third of women.

Despite widespread concerns about financial security in retirement, just one in five over 50s have used an IFA for retirement planning advice, but this climbs to around 25% within five years of the statutory retirement age.

More than half of over 50s have taken no financial advice at all, with a similar number saying they trust their own judgement to make the best of their financial situation.

Of those taking advice from IFAs, 40% of over 50s asked about ISAs, 33% about low risk investment, 22% for pension drawdown and another 22% for other pension planning.

"Already one in ten of the UK's over 65s are not fully retired, and this figure could rise rapidly unless those nearing retirement take steps to increase their savings," says Mike Rogers, group chief executive at LV=.

While he understands people are focusing on their everyday costs and supporting their families in the recession, he is still concerned one in five has cut their savings towards retirement.

Rogers says it is vital older workers questioning when they will be able to retire, review their options.

"There are now many more investment and income generating options than there used to be for people approaching retirement, but too few are taking advice," he says.

"As a result millions may miss the opportunity to secure a comfortable retirement."