Over-55s are worried about running out of money in retirement and are confused about retirement income options, new research* from behavioural finance experts Oxford Risk shows.
The study, with more than 1,000 over-55s, found half – the equivalent of more than 10.5 million people** – are worried that their retirement savings will not last their lifetime compared to just 27% of those questioned who are not worried about running out of money.
Around one in eight (12%) are even worried that they might have to depend on their children for financial support in retirement.
The study found that over-55s are waking up to the financial challenges of retirement with around 86% believing it is important to have additional sources of income to fund their desired retirement in addition to the state pension.
Unsurprisingly, the research found that those with retirement savings have more financial comfort than those who do not, with those holding a Self-Invested Personal Pension (SIPP) having the most financial comfort of any of the methods that people intend to use in order to fund their retirement.
Overall, Oxford Risk’s research shows widespread confusion amongst individuals around how to take their retirement income – just 49% say they are clear on their options for retirement. More than a third (34%) say they are not comfortable with the risks of having their pension invested in the stock market after they retire. This is compared with 31% who say they are comfortable with the risks.
Dr Greg B Davies, Head of Behavioural Finance at Oxford Risk said: “People approaching retirement face a series of critical decisions that will shape their lifelong financial wellbeing, and it’s clear that many feel confused and uncertain about their options. The biggest concern for many is ensuring their savings will last throughout their retirement. Personalised financial planning is essential to help individuals feel confident and comfortable with their choices.
“For advisers, the challenge lies in consistently providing the right answers for each investor’s unique needs—a task that becomes increasingly difficult without the right technology. At Oxford Risk, we’re collaborating with wealth managers and financial advisers
globally to equip them with the tools needed to deliver tailored, financially sound, and emotionally reassuring solutions at scale.”
To address these challenges, Oxford Risk has introduced its innovative ‘Retirement Income Suitability’ software solution. Designed specifically to support financial advisers and wealth managers, the solution is available now.
