30th December 2013
Nearly half of UK adults rely or plan to rely on the basic state pension to fund their post-retirement leisure activities according to new research from Nationwide Building Society.
Whether it’s going on a round the world cruise, lazing on an exotic beach or visiting the Northern Lights, the analysis found that 48% of respondents expect the basic state pension of up to £110.15 per week to fund the trip.
But the survey also found that nearly one in four UK adults aged between 45 and 54, some 24%, have yet to start making any financial provision for their retirement years.
Gender and age split
More than a half, at 53% of men rely or plan to rely on their basic state pension compared to 44% of women. Reliance on the basic state pension also generally appears to increase with age. Whereas only 39% of those aged between 25 and 34 plan to use the basic state pension to fund post-retirement leisure activities, this rises to 58% of people aged over 55.
Other source of funds
While the state pension is still seen as the primary source for post-retirement leisure activities, those polled state they also use or plan to use other forms of finance such as money in a current account or savings account, including ISAs, the cash lump sum claimed from a private pension, their annuity and money from property.
Popular retirement activities
The study reveals that seeing the Northern Lights is one of the most popular aspirations with 45% of UK adults not yet retired admitting they would like to visit Northern Norway.
A seven-night Northern Lights break to Lapland costs around £1,000 per person half board, including many activities such as a snowmobile ride and a husky safari. If this trip was to be funded purely from the basic state pension, it would require someone to save up their entire state pension for a minimum of nine weeks.
Rob Angus, Nationwide’s head of protection & investments, says: “Our research suggests a misguided view that the basic state pension will be sufficient to fund life in retirement. If that is their only source of income, retired people are unlikely to have enough to achieve the lifestyle that they hope for.
“This is why planning and saving for retirement is vital. In fact, it is one of the most important financial steps people will ever make, which is why it is concerning that around one quarter of UK adults have not started planning for retirement. It is certainly something that can never be started too early. The longer it is left, the more disastrous the outcome for people’s finances and the tougher those older years are likely to become.”