With the new pension freedoms coming into force this month, only 20% of over-55s are planning to take up George Osborne's offer to cash in their pension pots early according to a new report released by Warner Leisure Hotels, underpinned by consumer research from market intelligence agency, Mintel.
The report has found that nearly half of Warner’s guests are unaware of the new changes. Of those who are aware, only three in ten praise the reform as being a 'great idea' stating 'It’s our money and we should be able to do with it what we please.'
Of those who will be dipping into their pension pots early, investment tops the list as the number one option (12%), highlighting the financial savviness of this generation in choosing to access their pots to further increase their capital.
However, with additional financial pressures on the over-55s to share their wealth with their families, the ‘Bank of granny and grandad’ is open for business. Nearly a quarter (23%) of parents state grandparents are already topping up their grandchildren’s savings and 16% provide regular financial support to the whole family. More than a third of those polled admitted that one of their biggest concerns is to ensure they are able to leave a legacy for their families.
And it seems we are now moving towards a trend of ‘phased retirement’, with 11% of over-45 year-olds choosing to put full retirement on hold in favour of a hybrid of working and retirement.
Driven by the increase in life expectancy, monetary needs and the desire to keep working beyond the traditional retirement age, this trend is further supported by the fact that nearly a quarter (24%) of those aged between 65-74 are choosing to continue working.
Phasing in retirement is only set to grow as a popular life choice amongst this generation with the majority (58%) of non-retired adults agreeing that they will probably have to work beyond the state pension age.
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