More than 80 per cent of baby boomers still claim ignorance over how to find the best income-generating investments, with just a couple of months before the UK can enjoy pensions liberation.
BlackRock’s latest Investor Pulse survey also found 40 per cent have not yet begun to save specifically for a pension and are underestimating the size of pot they will need for retirement by almost £150,000.
Many thought the size of pot required would be £304,000 when it transpires that £440,600 is a more accurate figure – more worrying given that almost six in 10 survey respondents expressed concerns they would not live comfortably in retirement.
The opportunity for advisers to better educate their clients on the options available at retirement accumulation and decumulation stages was cast in the spotlight during last year’s Budget.
Yet BlackRock’s survey – in which 2,000 of the total sample of 27,500 financial decision makers were from the UK – revealed that more than a quarter of baby boomers are still undecided on their retirement action.
Of the 55-74 year-olds, 26 per cent said they would opt to stay invested in their pension plan taking regular withdrawals and use part of it to buy an annuity.
A further 17 per cent said they planned to withdraw their entire pension and invest it elsewhere, with 9 per cent hoping to generate an income and 8 per cent preferring a cash saving account despite the effects of inflation eroding their savings.
BlackRock head of EMEA retail Alex Hoctor-Duncan said: “We are all living longer, the average 65 year old woman in the UK is expected to now live until 86 and for men until 83.
“So it is important that baby boomers think very carefully about how they will sustain their income through a much longer retirement than previous generations.”
