Prudential: Pensioners failing to budget for retirement

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Prudential: Pensioners failing to budget for retirement

Mon 21st Jul 2008

Pensioners are not budgeting for retried life despite the economic slump, according to research by Prudential.

More than a quarter (29 per cent) spend more in their first year of retirement, with outgoings of £8,000 more than in the following years.

Of those who spent more in their first retired year, 19 per cent regretted it.

Approximately one third (32 per cent) of retired adults set a retirement budget, while 17 per cent visited a financial adviser for advice on living on a pension.

While 34 per cent said they played their budget by ear, 63 per cent said they felt they had planned their finances adequately before retiring.

Gary Shaughnessy, managing director of life and pensions, said the results were "quite worrying" and noted that people could fail to factor increased longevity into their financial plans.

Friends Provident has warned people against depending on property or equity release to fund their retirement.

Jeremy Ward, head of pensions marketing, said that if house prices continue to fall, people could experience "serious financial difficulty with negative equity on their property and no personal pension".

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