State pension alone not enough – survey

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Half of adults surveyed in the North West admit they use or plan to use the basic state pension to fund post-retirement leisure activities.

But many of them don’t realise it will not be enough to give them a good lifestyle, according to a new survey

Fifty per cent of adults in the North West rely or plan to rely on the basic state pension of up to £110 per week to fund their post-retirement leisure activities, says research by Nationwide Building Society.

In addition, 23 per cent of adults in the North West plan to continue or have continued working part-time during retirement in order to fund any leisure activities.

The study reveals that seeing the Northern Lights is one of the most popular aspirations with nearly half of adults in the North West admitting they would like to visit Northern Norway at a cost of around £1,000 per person – at least nine weeks’ entire state pension income.

People’s reliance on the state pension in retirement could in part be down to a lack of financial planning earlier in life. The survey highlights that, in the North West, around one in five adults who say they plan to retire have not started planning for it yet.

Rob Angus, Nationwide’s head of protection & investments, said: “Our research suggests a misguided view that the basic state pension will be sufficient to fund life in retirement.

“If that is their only source of income, retired people are unlikely to have enough to achieve the lifestyle that they hope for.

“Nearly a quarter of people in the North West also admit they plan to continue working during retirement. However, as most people are unlikely to work forever, they cannot generate income for themselves forever. This is why planning and saving for retirement is vital. In fact, it is one of the most important financial steps people will ever make.”

Mr Angus added: “It is concerning that around one quarter of UK adults have not started planning for retirement. It is certainly something that can never be started too early. The longer it is left, the more disastrous the outcome for people’s finances and the tougher those older years are likely to become.”