Millions could face a retirement without all the trimmings
PENSION Awareness Week (September 13-17) aims to help people to value and understand their pension and plan for their retirement.
Trips to the seaside, pints in the pub and coffees with friends are amongst life's little joys Generation X crave most for their post-work years, but many could be facing a pension without all the trimmings according to new research from MoneyHelper.
Some 12 million Gen Xers (88 per cent) have not calculated how much they will need to live on in retirement and less than a third (29 per cent) have considered the cost of socialising at this stage of their life.
Over 2,000 UK adults aged 40-55 years were asked to take stock of their hopes for retirement. The pandemic has meant of those planning to retire, four in ten (41 per cent) have reassessed their priorities for retirement such as what they will spend their income on, and 33 per cent of Generation X want to prioritise socialising over 'big ticket' items and experiences such as holidays.
Over two thirds (73 per cent) said spending time with family and friends is more important to them now, and (55 per cent) are making a more conscious effort to socialise with their loved ones.
The simple pleasures Generation X are most looking forward to in retirement are:
:: A trip to the seaside (42 per cent)
:: A meal out in a nearby restaurant (34 per cent)
:: A coffee with friends (33 per cent)
:: Gardening (32 per cent)
:: Entertaining family and friends at home (28 per cent)
:: A drink in their local pub (24 per cent)
However, while those surveyed were most likely to say they want to enjoy a meal out, a coffee with friends and a drink at the pub once a week, they may not be able to afford these things as often as they'd like if they are on track for a 'moderate' standard of retirement.
The recommended 'moderate retirement' budget for eating out is £900 a year but Gen Xers would need £1,013 to enjoy the social life they want in retirement - and could have to cut back on six weeks of dining out, or the equivalent of 33 coffees or 9 restaurant meals.
Research from the International Longevity Centre has shown that just 7 per cent of Generation Xers with a defined contribution pension are saving enough to achieve a moderate lifestyle in retirement.4 This means some could face a watered-down retirement.
According to the findings, 39 per cent of 40-55 year olds have been negatively impacted by the economic downturn and effects of Covid-19. More than a quarter (27 per cent) said their retirement pot will likely be smaller due to being furloughed or made redundant during the pandemic, whilst 27 per cent also said they will have to retire later due to the financial impact of Covid-19.