Britons are taking a “rose-tinted view” of their financial future, it has been suggested.
In a study carried out by Aegon, some 22 million adults are currently at risk of being in poverty when they look to retire. Meanwhile, 9.6 million respondents do have a long-term savings or pension scheme in place. And with a “reality gap” in place between their expected financial situation in later life and what they are actually saving for, consumers could find difficulties at managing their money increased.
Just over a third (37 per cent) of consumers believe that they are currently saving and investing enough money to provide them with a comfortable lifestyle in later life, as more than 35 per cent believe that they will realistically be able to stop working before they reach the age of 65. And despite highlighting that consumers are aware that they are not putting enough money away to secure their financial future, Aegon showed that about a third would not choose to seek advice on monetary products such as pensions and investments.
Overall, 30 per cent of Britons surveyed by the financial services provider claimed that they would need between 15,000 to 20,000 pounds every year to be able to have a comfortable retirement.
Commenting on the study, Malcolm Flanders, director of individual pensions at Aegon, said: “Many people are still expecting to retire before age 65 and lead a comfortable lifestyle. The fact is a large swathe of the UK population risks being financially impoverished in retirement. Our survey suggests that many people are still expecting to rely solely on state benefits, or are gambling on the prospect of their children taking care of them. But we believe it’s important that people take action now and plan sensibly for their retirement.”
“We need to take off our rose-tinted glasses and take responsibility for properly planning our financial futures. We would urge people to act now before it’s too late and take control of your financial future,” he added.
And with many millions of Britons looking set to face financial hardship in later life, taking out debt consolidation loans to pay off money owed to various creditors and so freeing up more money to save could well be advisable. However, Derek Oakley, insolvency director at Debt Free Direct, has warned that continuing to make poor financial decisions even after receiving such a loan could leave consumers with even greater problems.
Earlier this month, Mr Oakley suggested that a number of consumers are getting into debt difficulties as a result of unwise choices “or not being accurately able to assess the impact” of the monetary decisions that they choose to take. He added that those considering taking out a debt consolidation loan may find that it is not always the right option for them as if they are in a great level of debt than taking on more borrowing would be “simply moving things around”. Consequently he suggested that there was a need to implement financial education to encourage greater knowledge and responsibility in areas such as personal loans and savings.