Londoners rank bottom for retirement planning
But fail to accept that living standards will have to decline
Almost two thirds of Londoners have no financial plans in place for when they retire – yet most still won’t accept that their living standards will have to decline.
Whilst 63% of Londoners have yet to get their retirement finances sorted, and a mere 17% expect that the state pension will support them, workers in the capital are continuing to live in the false hope that they won’t have to take a financial hit. Just 60% expect to see a decline in their standard of living when they stop work, the lowest of any region, despite the fact that over half are far to preoccupied with enjoying life now to save for retirement (59%). 54% claim that they intend to start pension planning later in life – but with some of these people falling in the 55-64 age range, the amount of time left for them to do this is rapidly diminishing.
The findings come from TNS’ annual Financial Planning study, which highlights a growing gap between perception and the reality of how people are handling the pension deficit.
The credit crunch is already exacerbating the situation – with 77% of people across the UK admitting that other financial commitments are now preventing them from saving for retirement. This is a 5% rise on the 2007 figure – suggesting rising mortgages and fuel bills are taking their toll on our long term planning.
What the credit crunch has so far failed to do is encourage people to reprioritise. 61% of Brits argue that enjoying life now is more of a priority than saving for retirement. This is actually an increase on the 2007 figure – suggesting people are still some way off tightening their belts ahead of the looming recession.
And the notorious London property market is no longer a safety net, with a declining number of Londoners believing that property investment is still a good way of planning for the future (67% think it is good now vs. 74% in 2007).
Sharon Rees, Head of TNS Finance, comments: “It’s no surprise that rising living costs are impacting on people’s propensity to save for retirement. What is worrying is the ongoing naivety that we are exhibiting – with people accepting that they will be short of funds on retirement, but still refusing to plan ahead. It’s a strange juxtaposition that so many of us say we accept that our living standards will decline, but still insist on spending our cash on enjoying life now instead of trying to save a little. When reality catches up, those without retirement funds will be in for a rough ride; it will be interesting to see what impact the economic downturn has, as people get a taste of being short of funds and realise that it’s not a comfortable option.”