Almost five million people are planning to rely on an inheritance to fund their retirement, according to recent research conducted by The Share Centre…
Almost five million people are planning to rely on an inheritance to fund their retirement, according to recent research conducted by The Share Centre.
Even though the pension reforms which were introduced in April offer much more flexibility for savers to fund their retirement, 11 per cent are choosing not to take advantage of this and are instead hoping an inheritance payout will cover their costs. In fact, the majority of people stated that they would rather spend their money now instead of saving, but not all can guarantee they will receive a sufficient inheritance payout.
Surprisingly, the most popular method for building a pension is to use a savings account. 53 per cent of people state that this is their main method of saving money. 40 per cent of people choose a cash ISA as their main saving method, while 39 per cent use a work pension that their employer also contributes to.
Ten per cent of respondents admitted that they don't currently have any saving methods in place for retirement. This was predominantly the younger generation. However, 64 per cent of people aged 65-74 stated that they have put money aside from their own savings for their children or grandchildren.
Richard Stone, chief executive of The Share Centre, commented: "Holding out for a pot of money that isn’t necessarily guaranteed is a very risky game to play, and people need to take control of their long term savings to be sure it will come through. Even if you are left a healthy inheritance it’s unlikely to fund your whole retirement which could last 30 years or more. Indeed with increased life expectancy more and more individuals will have already retired before they inherit, to say nothing of where this approach will leave the next generation."