The decision to stop working can be daunting for many Brits. Understanding retirement can sometimes be the difference between having a secure financial future or taking a risk which can lead to financial repercussions. But how many Brits are delaying retirement because of debt, and what retirement myths are misleading Brits the most?
Credit management company Lowell has conducted research to uncover whether Brits are delaying retirement because of debt. The findings also show the publics misunderstandings when it comes to retirement.
Brits delaying retirement due to debt
Lowell’s research revealed that 17% of Brits who are delaying retirement due to debt are doing so for at least 5 years, and one in eight (12%) are delaying it for at least 10 years.
Specific research into Lowell’s Customer Panel revealed that almost a third of Lowell customers (31%) aged over 45 said they have considered or are actively delaying their retirement due to worries about debt. Worryingly, one in 10 (10%) Lowell customers aged 45+ said that they will never be able to retire.
The research also highlights that over one in five (21%) Brits are worried that their pension isn’t enough to live on. The table below reveals the true impact debt can have on retirement, with many Brits believing retirement will be delayed for 2 or more years.
|The time of retirement delay||%|
Brits’ biggest worries when it comes to retirement
The data highlights that Brits’ biggest retirement worries come from lack of funds, and not knowing how much pension they will receive. The statistics also reveal that 8% worry they will accumulate debt due to their state/workplace pension not being enough to live on after retirement.
|That a pension isn’t enough to live on||21%|
|Getting into debt after retirement due to your pension not being enough to live on||8%|
|Not being able to support your family from your pension alone||6%|
|Not knowing how much of your pension you will be paid||6%|
The misconceptions Brits believe about retirement
One misconception amongst Brits (18%) is that your state and workplace pension disappear when you die. Following a death, a sum worth up to 2-4 times your salary will be paid tax-free to your beneficiaries. If a Brit has already hit the retirement age before they have died, a percentage of their pension will continue to be paid at a reduced amount to their next of kin.
Another misconception around pensions are that 13% of Brits believe you must apply for a workplace pension. Brits are automatically enrolled into a workplace pension at the age of 22.
Other misconceptions highlighted include 12% of Brits believe you can access your state pension early, 11% think that you can only retire once you hit 65, and 9% believe that when your company goes into administration, you will lose all your already equivalated pension funds.
|Retirement myths that people believe to be true||%|
|Your pension disappears when you die||19%|
|You must apply for a workplace pension||13%|
|You can get access to your state pension early||12%|
|You can only retire once you hit 65||11%|
|If your company goes into administration, you lose all your workplace pensions||9%|
|There is no way to check your pension amount||5%|
John Pears, UK CEO of Lowell, comments:
“Lowell’s research confirms that our customers do have concerns around managing their debt and retirement. But, it’s also highlighted that there are many common misconceptions and worries surrounding retirement across the general public; indicating that our customers are not alone and that retirement fund fears are an important issue for many.
If you’re a Lowell customer and you’re concerned that your debt might have an impact on your future, contact our team to talk through your worries. They help thousands of customers everyday, and as part of our mission to make credit work better for all, we’ll always aim to help you clear your debts in a way that’s easy and affordable.
‘However, HowH\hit’s also important to know that there are many credible, impartial and trustworthy sources to support anybody struggling financially – whether you’re a Lowell customer or not – and a helpful list is available at our website https://www.lowell.co.uk/help-and-support/independent-support/.”
For more information: https://www.lowell.co.uk/about-us/lowells-blog/financial-health/does-debt-have-an-impact-on-retirement/;