New research commissioned by Smart, carried out by YouGov, suggests that over a million Brits over the age of 55 are planning on delaying their retirement due to the Covid-19 pandemic. The research also suggests that people no longer see retirement as a one-off event and want to be in control of their retirement finances with the ability to take their savings in a variety of different ways.
The news comes as Smart, the fast-growing global retirement technology platform provider which now manages almost £1.5bn of assets, launches Smart Retire, an innovative product that gives flexibility to plan and manage retirement savings in a personalised way. Four in ten savers over 55 say they plan on working part-time during retirement and will therefore need the opportunity to flex their income as necessary.
Will Wynne, Group MD & co-founder of Smart said: “While the headline impact of Covid is shocking news for a million people approaching retirement in the UK, this survey demonstrates that the nature of retirement is changing and fast. We know people want to be in control of their finances, but worryingly 47% of people on the cusp of retiring say that they want to manage their retirement without any help or guidance.
“Retirement is complex and we know people need help if they are to make the most of their savings. That’s why we’ve invested tens of thousands of hours conducting research, testing and developing our new Smart Retire solution which gives people flexibility and control, while guiding them through important decisions to ensure they are using their money in the right way. Importantly our approach, which helps people navigate their retirement options, bridges the advice gap while empowering people to make the most of their retirement savings.”
The YouGov survey, conducted on behalf of Smart in November 2020, painted a complicated picture for people approaching retirement.
Over half (51%) of people over the age of 55 think of retirement as an event with several stages. Furthermore, 7% of people don’t know how they will access their retirement savings and 20% don’t understand their options at retirement. This marries with the latest DWP research suggesting there was little evidence of people giving detailed consideration to the length of their retirement or their needs beyond the independent phase of later life. Despite all of this, Smart research suggests people want control and/or flexibility:
Almost 47% of those surveyed wanted to manage all of their retirement finances themselves with 37% wanting some support; and only 7% wanting someone else to manage their retirement finances entirely, while 30% want some assistance but to remain involved.
27% want to be able to change their income if their financial needs change and 29% want the ability to withdraw ad-hoc lump sums
Worryingly, 52% of people are also concerned about only being able to afford a limited lifestyle in retirement and 13% of those aged 55+ are considering delaying their retirement due to the Covid-19 pandemic. With an estimated 8.16m people in the UK between the ages of 55 and 64, this could mean over a million people delaying their retirement.
Smart Retire hopes to address this so-called ‘advice gap’ with guidance services rather than expensive advice. Members can use this solution in conjunction with personalised advice from a professional.
Built with four pots, and designed by an in-house research and UX team, Smart Retire allows users to scenario plan and change their pension strategy as required.
It includes two incomes pots:
- Flexible income pot – monthly income in the early years of retirement –
- Later life pot – leave money invested to buy a guaranteed income from an annuity provider later on in retirement
And two savings pots:
- Rainy day pot – dip in to this pot for emergencies
- Inheritance pot – put money aside to leave to a loved one
Smart Retire will initially be available to members of the Smart Pension Master Trust with it being rolled out globally in 2021.