Wise words from the over 50s

Planning for your future might feel overwhelming, especially when it comes to your retirement.

Whether your golden years are still miles away or if they’re just round the corner, it’s never too late to imagine what living your best life could look like in retirement.

In this article, you’ll find: 

• Guidance for the younger generation
• What should I think about for my retirement?
• How much do I need for my retirement?

Talking to someone who's been there, done that, and got the t-shirt could give you a different view on the decisions you might make. 54% of people, in our survey of 1,007 UK residents over the age of 50, say that clearing debts as soon as possible should be a top priority for younger generations. ^{Footnote [1]}  

When asked to be realistic in their previous financial situations, they would also encourage young people to:

• save whatever you can into an emergency fund (53%)
• start to save into a personal pension as soon as you can (52%)  ^{Footnote [1]}

More than a third (both 34%) would also recommend to maximise employer contributions into your workplace pension, as well as investing more into your workplace pension than just the minimum auto-enrolment.  ^{Footnote [1]}

When asked what they think young people should prioritise and spend money on, they said:

• making your house feel like a home – 41%
• experiences rather than materialistic things – 35%
• hobbies that you enjoy – 34%
• Critical illness or life insurance policy – 25%
• travelling the world (long-term) – 25%  ^{Footnote [1]}

More than one in five (21%) also said that young people should spend their money on getting financial advice from an independent financial advisor.  ^{Footnote [1]}

When asked what young people should spend less on, those surveyed said:

• Don't rely on credit cards or loans – 64%
• Don't spend extra money on designer / big labels – 54%
• Don't spend extra money than you need to on a car – 44%
• Don't spend too much money on your wedding day – 41%
• Don't spend a lot of money on material possessions – 33%  ^{Footnote [1]}

It may come as a surprise that half of women over the age of 50 (50%) say the younger generation should spend less money on their wedding day, compared to just a third of men (33%).  Indeed, only 4% of those surveyed say to spend the money for their dream wedding day. ^{Footnote [1]}  

73% of our survey participants who are currently fully retired took no debt into their retirement, compared to 60% of those who are retired part time. 59% of those who are not yet retired say they will take no debts into their retirement, while just under one in five (19%) will still have credit card debt to pay back and one in ten (11%) will still be paying their mortgage.  ^{Footnote [1]}

If they could do anything differently before retirement, nearly a quarter (22%) wish they had saved more money for a rainy day and just under one in five (18%) wish they had planned their finances better. In terms of their pension, a quarter (25%) wish they had taken their pension more seriously at a younger age and over one in five (22%) wish they had invested more into their pension overall.  ^{Footnote [1]}

The Pensions and Lifetime Savings Association (a not-for-profit organisation) publishes annual estimates for ‘retirement livings standards’ at three levels of income: ‘minimum,’ ‘moderate,’ and ‘comfortable.’ ^{Footnote [2]} Their 2024 estimates are:

Those aged 50 or over believe they need an average of £32,104.17 per annum to live comfortably. ^{Footnote [1]} However, this is an increase of just under £4,000 from our 2022 survey of 1,034 respondents, where results averaged £28,256.28.

The biggest comparison can be seen for women over the age of 50 who said they could live comfortably on an average of £26,488.05 in 2022 compared to £31,493.06 in our most recent survey ^{Footnote [3]} - that’s an increase of just over £5,000 in two years.  ^{Footnote [1]}

“Whether we want to travel, see family more often or spend time on our hobbies, living comfortably will look different for everyone. An increase of just under £4,000 in only two years is a significant change for the amount people think they will need to live comfortably in their retirement. 

This highlights why it is important to conduct research into your pension options and how you can get the most out of your retirement. This also shows how saving early and making regular contributions to your pension can impact your financial security in the future.”  says Aviva’s Head of Savings and Retirement, Alistair McQueen. 

Sometimes, it can be tricky or overwhelming to figure out how much you’ll have in retirement. To help crack on with those numbers, check out our pension calculator.