More than 600 of deVere’s new and potential clients from the UK, US, South Africa, Australia, Hong Kong and United Arab Emirates were surveyed; with 78% having no idea how much they would need to live on during their retirement prior to speaking with a financial adviser.
Nigel Green, chief executive and founder of deVere Group, said: “In the last few years, it has become clear that working age people do increasingly understand the need to save for their retirement.
“They know that the government won’t be able to support them as it has done for generations before due to an ageing population and shrinking workforce; that living, health and care costs will increase significantly; that company pensions are less generous, if they exist at all; and that we’re all living longer, meaning that accumulated funds need to go further.”
Personal responsibility
Green continued: “Therefore they know that saving for their retirement is now, without question, a personal responsibility for each and every one of us.
“However, what is alarming is that the vast majority do not know just how much they will need to save. This black hole in the detail – not knowing how much they will need in something as fundamental as funding their retirement – is extremely concerning indeed,” he said.
The study found that before sitting before an adviser, most new clients were shocked about how much was needed to live on, given their current ambitions.
“They have usually considerably underestimated the funds they will need,” he said. “This is true across all incomes, working age brackets and nationalities.”
Ostrich approach
Green is urging savers to “get their heads out of the sand and get informed”, saying it is better to start getting their affairs in order sooner rather than later.
He added: “Unfortunately, a failure to do so, will mean for many that they will be forced to work longer than they had hoped and/or significantly scale down their retirement aspirations.
“By having a clear financial plan you’re laying the foundations to have an active, comfortable and secure retirement.”
