Are you itching to consign your work clothes to the back of the wardrobe for good – or would you miss your colleagues, the challenge of the job – and a regular wage coming in?
Reports from the UK suggest that the EU referendum vote has prompted many people approaching retirement to look again at their decisions, it has been suggested.
Research has found nearly one in three people approaching retirement are considering changing their financial plans following the vote to leave the EU.
Around 30% of 55 to 64-year-olds think they will have to make new arrangements – and 37% of these people may delay retirement until the economic picture becomes clearer – Prudential found.
With around half a million people retiring across the UK each year, this could equate to 150,000 of these people changing their financial plans and 55,500 possibly pushing back their retirement.
Recent falls in annuity rates may also be partly behind some people’s decisions to go back to the drawing board. When many people retire, they use their pension pot to buy an annuity, which can give them a fixed income for the rest of their retirement.
However, the pension freedoms introduced in 2015 mean retirees are no longer required to buy an annuity and they generally have a wider range of options.
Prudential’s research, carried out during the week after the referendum vote, also found that across different age groups generally, one in five (20%) people think they will need to change their retirement planning and, of these, more than half (51%) think they may retire later.
There’s also some evidence that people will look to ramp up their savings amid the uncertainty.
One in six (16%) people surveyed plan to increase their savings, while 58% will continue to save the same amounts – despite low interest rates.
A fifth (20%) also plan to seek financial advice.
Prudential’s survey of more than 700 people across the UK also found 36% are concerned about the property market.
Many people, including buy-to-let investors, may be pinning their hopes on the value in their property to help finance their retirement.
And a recent report from Royal London suggested as many as three million working age Britons are relying on their home to fund their retirement – by downsizing to a smaller property.
However, according to the Centre for Economics and Business Research (Cebr), the average value of a UK home is still expected to be around £40,000 more in five years’ time, according to its projections.
Low interest rates also mean that many people are getting feeble returns on their savings, which could also prompt some to consider working for longer.
So how can those approaching retirement improve their position in the current economic uncertainty?
Vince Smith-Hughes, Prudential’s saving and retirement expert, says many people may well be thinking about their savings and pensions a bit more.
Firstly, he suggests getting an idea of how much money you have and tracking down any “lost” pensions from previous jobs.
Speaking to the Government-backed Pension Wise service could also be a good step.
Smith-Hughes says a financial adviser will also be able to offer help in looking at the best way to draw an income.
For many, working for longer is already a reality
As many as 1.2 million people aged 65-plus are still in employment, according to Office for National Statistics (ONS) figures.
Smith-Hughes says: “There are a lot of people now considering working past what would have been considered their state pension age.
“That’s due to a combination of things. Some of them are looking at going part-time, perhaps with the same employer, some of them are looking at different employers.
“Some of them are even looking at starting up a business when they get to their state pension age.
“We talk about retirement these days, and we have this idea that one day people are working five days a week, the next day they’re retired – it doesn’t really happen that way.”
How… have savings rates been affected by the recent interest rate cut?
The Bank of England base rate now stands at 0.25%, after being chopped from 0.5% – and savings providers have been adjusting their rates.
It’s more bad news for savers as according to Moneyfacts.co.uk – there were 354 savings rate cuts in August compared with just three rises.
That’s more than 100 savings rate cuts in August for every rate that has increased.
By the end of August, the average easy access rate on offer had fallen below 0.5% for the first time on Moneyfacts’ records, standing at 0.49% typically.
Moneyfacts says 20 “best buy” savings deals were withdrawn altogether in August – so if you see a good rate, consider grabbing it before it disappears.
Gender spending power gap has widened, study finds
The gap between men’s and women’s spending power has widened over the last year, research suggests.
On average, men have £487 a month in disposable income after essentials are paid for, while women have £118 less typically, at £369.
In 2015, a similar survey found an £80 a month gap between men’s and women’s spending power, with men having £412 in disposable income on average each month and women having £332, the research for VoucherCodes.co.uk found.
‘Traditional house-hunting methods still popular
Around half of house buyers end up finding their property through “traditional” methods such as spotting a for sale sign or browsing an estate agent’s window – despite the growth in house-hunting apps and websites, research suggests.
Some 55% of homeowners who bought their property within the last two years said they had found it this way, including seeing an ad in a local paper, finding it at an auction, or hearing about it from friends, family or neighbours.
Another 45% of people found their property on a website or through an electronic alert such as a notification from an app, according to the study from Which? Mortgage Advisers.
More people with problem debt owing cash to loved ones
The number of people struggling with debt who owe money to friends and family is rising rapidly, a charity has warned.
StepChange Debt Charity’s figures for the first half of 2016 show 28% of the charity’s clients now owe money to friends and family, compared to 20% in the same period in 2014.
On average, those in debt to friends and relatives have borrowed £4,046, up from £3,176 during the same period two years earlier.
