UK pensioners are failing to budget for life after retirement despite the economic slowdown, with many spending considerably more in year one than in subsequent years, only to regret their splurge as the reality of living on a pension bites, according to a new research conducted for Prudential.
The research also found that 19% of those who had spent more in the first year of retirement regretted doing so and only around a third of retired UK adults said they set a retirement budget.
The study conducted among retired UK adults, found that 63% said they felt they had planned their finances adequately before retiring. One of the key concerns is that people don’t have any idea how long they will live in retirement, and therefore don’t think about the longer term implications of over-spending when they first retire.
Gary Shaughnessy, managing director of retail life and pensions at Prudential, said: It is quite worrying to see the lack of planning people undertake as they approach retirement and it’s particularly surprising to see how few of today’s pensioners sought financial advice.
Seeing a financial adviser should be a baseline activity for everyone planning their retirement so that they structure their finances to maximize retirement income from all available sources, including pensions, savings and investments and equity in their homes, if necessary.