The overwhelming majority (94 per cent) of recently-retired pensioners are enjoying their retirement years, but more than two in five (41 per cent) regret retirement-planning mistakes which have left them struggling financially, according to a survey of pensioners who have been retired for five years or less.
32% of pensioners lead a less comfortable lifestyle in retirement
Nearly a third (32 per cent) of pensioners are leading a lifestyle less comfortable in retirement than when they were working, and they feel that decisions they made both before and after retirement have had an impact on their quality of life, according to Prudential which compiled the research.
Regrets in retirement
Nearly one in five (19 per cent) recent retirees say that in hindsight they realise they didn't save enough for their retirement, while 15 per cent regret not starting to save earlier in their working lives. Meanwhile, many pensioners now regret not thinking hard enough in advance about their early years in retirement – one in 10 (10 per cent) wish they'd set themselves a budget to live on as a pensioner, others regret that they overestimated the value of the State Pension and not taking financial advice.
State Pension shortfalls
More than a third (34 per cent) of recent retirees regret financial decisions they have made since stopping work. The most common regrets include assuming that the State Pension would be worth more than it really is, spending too much money immediately after retirement and not being able to take advantage when they retired of the new pension freedoms that came into force in April 2015.
How new retirees take retirement income
When asked about their sources of income in retirement, nearly three quarters (72 per cent) of the recently retired will receive the State Pension, two-thirds (64 per cent) have a final salary pension scheme, just under half (48 per cent) have cash savings or cash ISAs, 28 per cent have shares or stocks and shares ISAs and 21 per cent have annuities.
It was worth the wait
Yet despite the money concerns, recent retirees are almost unanimously enjoying life since giving up work – (94 per cent). The luxury of having more free time stands out as a benefit for 77 per cent of them, and 63 per cent said that being less stressed was a retirement bonus. Not having to commute to work any more was singled out by 62 per cent, while having more control over life decisions and spending more time with family were both highlighted by 60 per cent.
Stan Russell at Prudential, says: "The fact that virtually all recent retirees are enjoying life after work shows that money isn't the be all and end all of a happy retirement. However, sooner or later, the financial choices made while still at work or shortly after retirement will have an impact on the lifestyles of many pensioners.
"The best way to secure a comfortable retirement is to save as much as possible as early as possible in your working life – a discipline that many of our respondents say they regret not getting into before giving up work."
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