Many people in Glasgow and Lanarkshire do not yet fully understand the significance of the new retirement income choices. At ad+ we often find that even some experienced business owners do not appreciate the significance of the changes available for retirement income from 6th April 2015.
According to a recent ‘Real Retirement’ survey (full sources and references below) by Aviva more than half of the UK’s residents aged over 55 have said that they will be completely unaffected by the massive changes to retirement income announced in the Chancellor’s Budget of 2014.
Aimed at providing more freedom of choice for our rapidly ageing population, the changes seem to have fallen on ‘partially deaf’ ears… with approximately 54% of survey respondents certain that they don’t want to be revising their retirement plans.
Tax implications brought by the changes
This apparent disregard for the changes outlined in the Budget is not due to a lack of awareness. Almost 80% of those aged over 55 and not yet retired from work claim to be aware that taking all of their money in one lump sum is now an option.
- In the survey only 10% (1 in 10 people in this age group) believe the changes will affect their plans. It has been suggested that many people don’t fully understand yet the significance of the new choices for taking retirement income and the corresponding tax implications.
Cautious Spending Plans
In the small group who say that their plans will be affected by the changes, most (almost 60%) expressed an interest in taking some or all of their pension savings straight away – whilst just over a third say they may take some of their pension savings as a lump sum to fund their retirement. The survey reports that 14% of this small group hope to pay off their remaining mortgage by taking advantage of the new legislation.
- 49% of over 55s surveyed (who are still in work) say that they do not see any advantage in taking their pension savings as a single lump sum, perhaps naturally being cautious of spending too much, too soon.
Rising Concerns About Money Running Out
Retirement can be a worrying time for many with uncertainty about how long their savings will last. Only just over half (52%) in the age group, both retired and those still working, think they will have sufficient funds in their retirement. However, 17% are reported to be worried they won’t have enough to last them through retirement. Over a quarter think that they ‘might’ have sufficient funds.
‘More Important Worries’ For The Over 55s
It may come as a surprise that concern about running out of money in retirement comes nowhere near the top of the list of worries people have in this age group! Only 13% rated it as one of their major concerns, with more fundamental ageing issues highlighted by the survey are:
- Ill health (56% or Dementia (50%)
- Becoming dependent upon other people (36%)
- Moving into a care home (30%)
- Dying or people close to them passing away (25%)
How We Can Help
here at ad+ we’ve helped many ambitious entrepreneurs throughout Scotland to create and implement an integrated business and personal wealth plan.
If you would like to arrange a meeting to discuss this matter, or would simple like more information, please get in touch:
- Phone: 0141 643 9200
- Email: firstname.lastname@example.org
The Aviva Real Retirement Report is produced by Aviva in consultation with ICM Research. The Real Retirement tracking survey referenced has been running since 2010 and totals 19,193 interviews amongst the population aged over 55 years. 1,202 people aged over 55 years were polled for this Q2 2014 wave of research.
Pension and investment advice will be given by our sister company, ad+ Financial, which is regulated by the FCA.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
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