Holiday hopes put retirement at risk

Research for GE Life shows that a quarter of people who want to retire by 2010 plan to use their tax-free retirement lump sum on a break, despite findings that current retirees struggle to survive on pensions.

Scott Dolfi, chief executive of GE Life, urged people to be “realistic”: “The reality is that the golden days of retirement are far from a realistic prospect for the majority, and retirement really won’t be a holiday unless people take action now.

“Obviously people will want to celebrate the start of their retirement, but it’s important to think about the long-term.”

His calls come as an increasing proportion of pensioners are found to rely on overdrafts and other loans to pay just for the essentials such as bills.

Instead of saving to cover this eventuality, people planned to spend retirement money on holidays or new cars.

Mr Dolfi urged people to consider that they could well be living into their 80s and need savings to stop their retirement being one saddled with a large debt burden.