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Almost one in five think they'll never be able to retire

The removal of later life financial mechanisms now means there is a gap in the financial planning requirements of many

27 January 2016

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Retirement is out of reach for two out of five people aged 45 and over who would like to retire in the next five years, as financial pressures will not allow them to do so.

Only 18 per cent of respondents (one in five) to HSBC's global survey on retirement expect to be able to fully retire at any point during their lives - this is almost double the number of 2015.

The main barrier respondents identified is an apparent lack of money, but Charlie Nunn, HSBC group head of wealth management, suggests that for many, this isn't the problem - he believes that those who have the capacity to save simply are not doing so.

'People worldwide are recognising that retirement can be an opportunity for reinvention and new beginnings.

'People should consider these aspirations when planning for retirement and ensure they are making sufficient financial provisions for this new chapter in life. Even small amounts saved today can lay the groundwork for a comfortable retirement tomorrow, placing retirement dreams squarely within reach.'

Alan Dick, a financial planner and chairman of the Chartered Institute for Securities and Investment's (CISI) financial planning professional forum, has suggested that the pessimism revealed by the survey may be due to a lack of planning on the part of workers.

'Do people really know how much money they will need to enjoy the lifestyle they want throughout retirement?

'I am not talking about a rough rule of thumb but rather an estimate of the actual cost of the desired lifestyle, taking account of inflation and life expectancy and building in some margin for error. As human beings we are naturally scared by the unknown. If you don't know how much your retirement is likely to cost it is natural to assume the worst.'

Dick added that increasing life expectancy and the lack of company sponsored final salary pension schemes now mean that individuals have no one to rely on to manage their finances but themselves.

The survey also showed that nearly a quarter (23 per cent) of people aged 45 and over who want to retire in the next five years cited the negative impact work has on their health.

All respondents to the survey said they expect their life to improve in retirement, with 45 per cent citing a better social life and 39 per cent said a better relationship with their spouse for their optimism.

These statistics were almost identically reflected by people who are already in retirement, who cited the same or similar reasons for their improved quality of life in retirement.

Meanwhile, 62 per cent of people do not know how much they will have to spend on later-life healthcare treatment for themselves.

 

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