Almost two-thirds of adults disagree that retirement is a time of pleasure, and financial worries loom large particularly for women, according to a new survey about attitudes to retirement, which calls for mandatory financial education. 

 

10,000 UK adults at different stages of their retirement journey, including those new to the workforce, those approaching retirement and pensioners, were surveyed by investment platform Interactive Investor, together with market research consultancy CoreData. 

Retirement is often seen as a time to sit back or do the nicer things life has to offer, but financial uncertainty can mean this life phase is less enjoyable than it could be.

 

The survey found confidence about finance and financial literacy to be a key obstacle to good outcomes, with women more than twice as likely to say they are not confident that they possess the required knowledge to manage their own finances. Financial literacy not only improves people’s financial but also their emotional wellbeing, according to the study. 

 

Those with a final salary pension are more likely to be in a position of knowledge when it comes to pensions. Two-thirds of people without a final salary pension scheme either have only a vague idea or no idea about what their income in retirement will be, compared with 44% of those who hold one.  

 

To address the gap in financial knowledge, Interactive Investor’s head of personal finance, Moira O’Neill, is calling for financial education at all life stages, and for this to be included in all schools from primary school age. Currently, it is part of the curriculum in key stages 3 and 4 but not mandatory for academies, faith schools and private schools. 

 

“We call on the government to mandate time in the curriculum for financial education, and ensure teachers have the right guidance to teach it. This would be far more achievable if it was a standalone subject,” says O’Neill. 

 

"Financial education should also be delivered in the workplace to help employees understand the basics of money management, such as saving and budgeting, as well as the benefits of saving into a pension. We believe employees would benefit from a mandatory briefing at the start of their employment exploring how pensions work, the changes to the retirement landscape, the options available through their workplace pension and how different contribution levels could result in vastly different outcomes,” she adds. 

 

 

The survey also showed that retirement is often linked with financial concerns, as people worry about their income and investments.

 

Pensioners said the possibility of a stock market crisis is a major concern for them (42%), ahead of running out of money (35%), tax issues (24%) and not being able to help younger family members with large expenses (24%). For pre-retirees, running out of money in retirement is the primary concern (26%), ahead of the rising cost of living (23%) and not being able to pay for quality long-term care (10%). 

 

The survey revealed the real-life impact of the pension gender gap, as nearly two-fifths (37%) of women say they will need to make major lifestyle changes to maintain their standard of living in retirement, compared with 18% of men. Nearly two-thirds of pre-retirees said they will rely on their spouse for money in retirement, leaving them at risk in case of divorce. 

 

Men are more than twice as likely to work in retirement for enjoyment, while women are twice as likely as men to do so out of financial necessity. Overall, more than half (52%) of non-retirees plan to keep working into retirement part-time or in self-employment. 

 

Jonathan Watts-Lay

 

Steven Cameron