Worried about your financial future... well you're not alone
Retirement can be a daunting thought for many, for a range of different reasons. Some worry about health. Whereas for others, money is a major concern.
Research carried out by YouGov found that almost half of over 50s are worried about not having enough money in retirement to do the things they want to.
This compares with just over a third who are concerned about health problems.
Asked about what was important when thinking about retirement finances, seven in ten of the over 50s said the ability to pay their bills, with more than half saying the ability to go on holiday was important to them.
As part of their annual retirement report, Scottish Widows also carried out research exploring the correlation between stress levels and retirement.
Observing a group of 54 men and women aged between 35 and 45 from across the UK, they aimed to depict the effects of retirement on stress levels by presenting participants with two videos of opposing retirement situations. The first film painted a happy picture of retirement while the second film drove home the financial hardship and unhappiness of poverty in later life. Wired up to oximeters that measured their pulse rates, the scientists monitored signs of relaxation and stress, including facial movements and body language. The group was then asked to share their feelings and whether the videos would make them revisit how much they were saving towards retirement.
Just 3.5 minutes of footage made 90% of participants reconsider about retirements savings.
An overwhelming majority of participants demonstrated clear signs of stress while watching the film about poverty in later life
78% said that the video had made them worried about how much they were saving towards retirement and their own financial prospects later in life
2-5% of participants pledged to increase their monthly pensions contribution after the experiment
And whilst the simple answer to this would be to increase savings and pension contributions, the question still remains – do you actually know how much you need to retire?
The fact is the majority of people have no idea where they are heading financially. You may have assets, investments or high levels of income, but most have no idea what this means or what sort of financial future awaits.
Don’t leave it till it’s too late
The research by Scottish widows also found that those saving nothing for their retirement showed the least stressed responses.
However, according to Jo Hemmings, behavioural psychologist, “denial of a situation that feels too distant in the future can create a false sense of security that prevents people taking action to resolve it. This is certainly true of retirement planning. The purpose of putting money away for a distant older life can feel too abstract and unreal in younger life and can therefore be ignored.”
Therefore, it’s best to begin this process as early as possible (ideally early 50s) so that if shortfalls are to be predicted, we have time to identify different options you can take to fill up those pensions pots as quickly as possible.
With our service, 'DAM Wealth Management' designed specifically to shape investment strategies that will help to preserve, protect and grow your wealth alongside your needs of the here and now, we will provide you with a visual depiction of your financial future so that you can be assured your funds will last, and if not, we’ll work with you to identify alternative paths you can take to refocus your spending priorities and fill your pots accordingly.
You only get one shot at this, and our team of dedicated expert advisors are here to ensure you do it right.
Get in touch now to find out how we can shape your financial future.