Millions of over-55s are failing to include their family in important decisions about their retirement income with potentially devastating consequences, Aviva's latest Real Retirement Report shows.
The findings show that money is often seen as a taboo subject within the family, leading to important decisions being brushed under the carpet. This apparent reluctance to share and discuss important financial decisions within the family comes at a time when the government is introducing more flexibility and choice in the way people take their retirement income, as outlined in this year's Budget.
The research also highlights that people are failing to protect their loved ones by not getting the basics of a will in place, despite recognising the importance of inheritance for their loved ones.
The Spring 2014 edition of Aviva's Real Retirement Report explores the views of those from three distinctive stages of retirement -- pre-retiree (aged 55-64 years) retiring (aged 65-74 years) and long-term retired (aged over-75 years). The report investigates the role of the family in retirement, and the way in which people consider their family in their retirement plans and their decision-making.
It reveals that while having a conversation with family members about retirement plans and wishes is a crucial step, for many, the idea of discussing financial matters is often off-limits.
Subject of money is taboo
Many of the over-55s with family want to keep their financial position private with more than a quarter (28%) of those with family saying they have not had a conversation with either their spouse or their family about their retirement finances.
Nearly two-thirds (64%) of over-55s say they have revealed their financial retirement plans to their spouse, but only a fifth (20%) have updated both their spouse and family on their plans.
Among those that have not discussed their financial affairs with family, half (51%) feel it is a personal matter. A quarter of people (25%) say they have not had a discussion because they do not have full view of their finances, which is highest among the 55-64s (32%).
Lack of estate planning
More than a third (37%) say leaving some inheritance to make sure their family are provided for when they are gone, is important to them. Yet only 59% of over 55s have put a will in place, rising to 76% in the over-75s.
Factoring family into retirement choices
Worryingly, while family is important, less than a quarter (22%) have chosen options that provide some income to their spouse should they pass away. Although they wish they could provide some financial support to their family, 15% say they cannot afford to do so.
Priorities in retirement
With retirement promising more time and freedom away from the workforce, over-55s are most preoccupied with pursuing a lifestyle of personal interests and hobbies.
Top of the over-55s list of things to enjoy in retirement are: more time to do what I want (66%), spending time on hobbies (45%) and travelling (41%).
An interest in pursuing individual interests only accelerates with age, with the over-75s appearing most keen on having more time to do what they want (70%) and spending time on hobbies (53%).
Family is also important to the over-55s. Some 44% said they want to live close enough to their family to spend time with them. Yet this is a higher priority for women (48%) than men (40%).
Guiding the over-55s
With guidance for consumers emerging as a key theme from this year's Budget, the over-55s say they would most like assistance on how they can make the most of their retirement income (21%). Preparing for the possibility of long-term care also features on their list of things they would like guidance on (18%), rising to 33% in the over-75s. Only 5% are looking for guidance on how they can protect their families through their retirement choices.
"Retirement planning has many benefits including offering the opportunity to maximise income from savings and investments, and achieving the lifestyle you want for yourself and your family.
"These findings reveal a stark difference between what people want to do about their retirement finances in respect of their families, and what they put into practice. The reality is that failing to address the needs of those close to you could mean they may lose out.
"With the changes to retirement income announced in this year's Budget, retirees are going to have far more freedom and choice in how they use their savings, and it's important they consider all eventualities, including the needs of their family. It is matter of finding the right solutions with the help of professional guidance and having open conversations with everyone who could be affected by the choices made at retirement."
Download the Aviva Real Retirement Report - Spring 2014 Watch the video
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