Martin and I headed up to London yesterday evening, to attend the launch of a new report from LV= at the Institute of Directors.
We had been invited to join other leading advisers and financial journalists to be the first to hear results from their latest research into the State of Retirement in 2014.
Released only a day after the Budget and its pension bombshell, it was great to hear topical data and findings about the State of Retirement.
LV= explained that the number of people reaching retirement in the UK is growing quickly, as the ‘Boom Train’ of Baby Boomers reaches ages 60 and 65 over the next 15 years.
This is an important theme we are currently exploring as we film our Financial Planning documentary, Boom!.
They found that more people are qualifying for an enhanced annuity as they retire; on average last year, 57% of those reaching retirement and using an adviser qualified for better annuity rates due to their lifestyle or poor health.
The average size of a pension fund at retirement has also increased since 2004, highlighting the importance of advice.
LV= discovered three main things in their consumer research into the State of Retirement in 2014.
Firstly, there is a general lack of awareness of retirement income options. This is especially important following the Budget this week, as greater flexibility at retirement creates more options to consider.
Secondly, there is a significant gender gap when it comes to the understanding of or engagement with pensions and retirement income issues.
Women consistently responded to the research with a lower level of understanding than men.
Finally, LV= found a rise of DIY retirement income, with only 29% saying they had taken professional advice about their income options at retirement.
Given the complexity of these decisions and the importance relative to maintaining a desired lifestyle in later life, for less than a third of people reaching retirement to seek professional advice is a worrying finding.
Here is a short video Martin filmed last night asking John Perks, Managing Director of LV= Retirement Solutions, about the main findings in the State of Retirement Report 2014:
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