Many Britons could be on track to find themselves coming under financial strain, according to new figures.
In research carried out by Abbey, more than half (53 per cent) of adults claim that they are unaware how much money they would require to match the lifestyle they desire in retirement. The study also indicated that women are most likely to not know the amount of cash they need after giving up work, with 63 per cent of women guessing the sum incorrectly in comparison to 44 per cent of men. Meanwhile, findings from the company revealed that 53 per cent of those over the age of 65 - the majority of whom Abbey claims have largely already retired - are uncertain as to how much money they require.
As a result of experiencing difficulties with money pre-retirement, it is possible that a lack of understanding could cause many consumers to develop problems handling their finances once they give up work, due to a shortfall in pension funds. In turn, this may see many people come under strain when paying utility bills, personal loans and other areas of demand on their spending in later life.
Research from the firm showed that 12 per cent of Britons believe that a lump sum of 100,000 pounds or less will provide them with enough money to lead a comfortable retirement. However, Abbey reported that in purchasing an annuity at this price would see the average retiree have an annual income of 7,329 pounds - a figure below the typical annual earnings of people from countries such as Barbados, Puerto Rico and Hungary.
Meanwhile, money management difficulties could be even more pronounced for the 16 per cent of people who state that they can retire on 50,000 pounds or under. Should such consumers choose to get an annuity for this figure - it was suggested that the most money they would be able to get from it would be 3,568 pounds per year - about 304 pounds each month. Consequently, such a figure may see them develop difficulties in paying for utility bills and food, in addition to making repayments on personal loans, overdrafts, credit cards and other types of borrowing.
Reza Attar-Zadeh, head of savings for the financial services firm, commented: "Clearly Brits are not saving enough for their retirement. This is of particular concern, with the move from final salary schemes to money purchase schemes, which means increasingly people need to take personal responsibility for saving for the future."
As a result, those people worried about their ability to save for a pension that will afford them a comfortable lifestyle after they retire might wish to consider taking out a loan for debt consolidation purposes to help free up disposable income. In addition, such a loan could be useful for those who have already stopped working. Studies carried out by Key Retirement Solutions indicate that two-thirds of consumers over the age of 60 are in some form of unsecured debt. Overall, the average pensioner owes some 9,098 pounds via personal loans, while the average person within this demographic has an average unsecured debt of 35,480 pounds. Consequently, applying for a consolidation loan could help pay off a number of debts quickly.
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