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Pension assets are usually built up throughout a person’s working life and if substantial contributions are not made, it can lead to very difficult retirements. Evidently, this is a concern for many UK workers at the moment.
Wren Sterling, the pensions specialist, recently conducted research on what are common financial regrets among the employed.
The research asked 2,000 employed UK adults what their financial regrets are and now, with hindsight, how they would manage their finances differently.
The top cause for disappointment in their younger self was not saving more (40 per cent) followed by remorse over not buying a house sooner (24 per cent), enjoying themselves on nights out (21 per cent) and using a credit card (20 per cent).
Additionally, 10 percent said they would have thought twice about going to university.
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When asked what specific advice would they give their younger selves, the following answers came out on top:
- Start saving for a pension sooner – 44 percent
- save more, spend less – 41 percent
- don’t put off saving for retirement – 33 percent
- pay off your mortgage sooner – 28 percent
- invest in property – 25 percent
- invest more – 20 percent
- take professional advice -18 percent
- worry less about saving and experience more – 12 percent
- take risks for a higher return on your investments – nine percent
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Nick Moules, Wren Sterling’s head of marketing, commented on the findings: “When you’re young, retirement seems a long way off, but as people grow older they become more concerned about financial security and comfortable retirement.
“Interestingly nearly one in five (18 percent) employed adults in the UK would advise their younger self to seek professional financial advice and one in ten (nine percent) feel they should have taken more risk with their savings to make their money work harder for them.
“And it’s one of the reasons we’re happy to provide a free initial financial planning appointment for people.
“When they start to visualise the trajectory of their savings and retirement journey, it gives them a much clearer idea of what they need to do to be comfortable in retirement.”
Some of this regret may be caused by simple confusion over retirement options.
Recently, Just Group conducted a survey of 1,000 UK adults aged 45 – 54 and they went on to combine this data with research from the Money and Pensions Service, the FCA and the DWP.
They found that 59 percent of respondents were confused by their choices at retirement, with this rising to nearly two-thirds (65 percent) for women specifically.
Additionally, just 28 percent of respondents detailed they knew what they planned to do with their retirement savings.
To rectify some of this confusion, a pensions schemes bill has been created and is working its way through the Government.
This bill aims to make pension wise appointments mandatory for people when they turn 50 or go to access their pensions and Stephen Lowe, the group communications director at Just Group, commented on this development: “When the evidence shows that most people find their pension options confusing and are unsure what they will do with their savings, it seems common sense that the FCA and the Pensions Regulator should prioritise significantly increasing take-up of a free service that is proven to help people understand their pension choices as well as avoiding scams and paying too much income tax.
“The Pension Wise evaluation from the Money and Pensions Service tells us that these guidance sessions leave the vast majority of users better informed and more confident in their decision-making.”
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