Nearly one in eight workers think they will never be able to afford to retire fully, according to HSBC’s latest report, The Future of Retirement: Life after work? Among those already retired, many have less money than they expected, and some feel they were too hasty in giving up work.
The report, which surveyed 16,000 people in 15 countries*, shows that 12 per cent expected they would never be able to retire fully. In some countries, the figure was higher: 19 per cent in the UK and 18 per cent in the US. The survey also shows traditional retirement being eroded by economic pressures and longer life expectancy.
Generating an adequate income in retirement remains a major challenge for most people, given the financial conditions created by the global economic downturn
Among the retired, 38 per cent found their income was less than they had expected. Of these, one-third blamed the global financial crisis, while another third said they had not planned adequately. More than half said their outgoings since retiring were as high, or higher, than before, and on average, they expected their savings to run out.
Around 63 per cent of retired people worried that they did not have enough money to live on and 70 per cent regretted not having saved more.
Simon Williams, Group Head of Wealth Management, HSBC, said: “Generating an adequate income in retirement remains a major challenge for most people, given the financial conditions created by the global economic downturn. Today’s workers should prepare for retirement as early as possible to have some certainty. Life is full of reasons to prioritise short-term spending over long-term planning, but the sooner people start saving, the less they are likely to need to carry on working in retirement.”
A significant proportion of people surveyed said they were looking forward to working in later life. More than a quarter of people of working age said they intended to start a business in retirement and 44 per cent of those aged between 55-64 said that it was an aspiration to continue working.
The report identified four actions people could take to achieve a more comfortable retirement: taking family responsibilities into account; being realistic about likely costs in old age; not rushing to retire; and not relying on one source of retirement income.
*The report surveyed 16,000 people in 15 countries: Australia, Brazil, Canada, China, Egypt, France, Hong Kong, India, Malaysia, Mexico, Singapore, Taiwan, United Arab Emirates, United Kingdom and the United States. The findings are based on a representative online sample covering people of working age (25 and over) and those in retirement. The survey was conducted between July 2012 and April 2013. Due to limited survey sample sizes in Egypt and the UAE, research findings on the fully retired in these two countries are not available. Unless stated otherwise, figures are averaged across all 15 countries. Monetary values are expressed in US dollars ($). Figures are rounded to the nearest whole number.