While there is a state pension age – meaning the age when a person can start getting the UK state pension – there is no longer a specific retirement age. Nevertheless, many who are nearing the typical time of life when people tend to retire have been issued a warning.
The research found one in ten (12 percent) are planning for their retirement income to support them for just one to five years.
Commenting on the findings, John Tait, Retirement Advice Specialist at Standard Life, said: “Your long-term retirement income needs can be hard to predict.
“The ongoing uncertainty brought on by the pandemic has only made that even more challenging.
“Many people are struggling to think more than five or ten years ahead, meaning they’re not only at risk of not saving enough for retirement, but also might not be taking into account how their needs could change.”
Research from Standard Life found that three in ten (29 percent) of over 55s still working expect to need the same amount of money each year throughout their retirement.
Meanwhile, just over a quarter (27 percent) aren’t sure of their retirement income needs and how they will change over the years.
Standard Life found women are more unsure about their annual income needs in retirement than men, with a third (31 percent) reporting uncertainty around future income requirements, compared to 22 percent of men.
Issuing a warning, Mr Tait continued: “Some people will spend more in their early years as they travel or treat themselves with a big purchase, meaning their income needs will probably flatten out over time.
“However, costs can also rise in later life, driven by factors such as care needs or assisted living.
“When preparing to retire as an individual we recommend ensuring you have an income to support you until age 95, or to age 90 if you are planning your finances as a couple.
“That might seem like an excessive age to base a plan on, but the reality is people are living longer and one in four people approaching retirement now can expect to live until then.
“Thinking about how your life might change in the future may also help you develop a better picture of how much you may need and how much you can spend in the early years.
“Do you want to spend more now and less in the future? Working with a financial planner can help you make these short-term decisions with greater confidence about the long-term impacts.”
Seeking financial advice is an option some may take ahead of this time of life, however Standard Life’s research found that 80 percent of over 55s haven’t yet sought financial advice in relation to their retirement income needs.
Among them, 46 percent said they have no intention of doing so.
Mr Tait concluded: “Taking financial advice from an expert adviser can be helpful when it comes to thoroughly planning for retirement.
“They can assess your income sources and savings, consider your retirement goals and, perhaps most importantly, explore what costs you might need to prepare for in the future.
“Anticipating all possible costs well in advance can help you feel more comfortable about spending the money you’ve worked so hard to save, and needn’t adversely affect your retirement plans – you might even have more available than you think.”