Workers failing to prepare for their retirement.
New research from HSBC suggests the average retirement in the UK is expected to last 19 years, but that average retirement savings will be used up after a third of that time, just seven years, leaving people entering a period of significantly reduced living standards.
This 12-year shortfall in the UK is the worst identified by the international study, which covers over 15,000 people in 15 countries.
The figures are likely to particularly resonate in Wales where one in four people are aged 65 or over, a figure expected to rise to one in three over the next 20 years.
Iwan Rhys Roberts from Age Cymru said an average of 19 years in retirement was a good thing, because it was a reflection of the fact the population is living longer and staying healthy for longer.
But he said the increasing life expectancy meant we need to rethink retirement.
He said: "Given that the population is ageing, we're going to need to have a bit of a rethink about retirement and maybe be more flexible about retirement.
"Retirement for many people nowadays isn't what they expected, many people find that when they retire, there's a massive drop in their income, so retirement is something you need to think about and plan for.
"Everyone's situation is different but people need to have realistic expectations of their retirement.
People need to think about the life they want and what they need to do to have that life when they are retired.
"Not everyone is able to save and that is something we need to take into consideration, we need government action to ensure that older people have a better quality of life."
Currently 56% of the UK working population is not preparing adequately for later life, with one in five (19%) saving nothing at all. Financial concerns are their greatest fear about living in retirement, with 63% saying they fear financial hardship.
The lack of preparation means many may not be able to fund their aspirations, such as taking frequent holidays (49%), home improvements (31%) and learning new hobbies (30%). It also leaves people potentially unprepared for additional living expenses in later, or frail, retirement, such as funding long-term care.
HSBC predicts that the situation is only likely to worsen as life expectancy continues to rise around the world, and people fail to face up to reality of making up the shortfall while they can.
Christine Foyster, the bank's head of wealth development, said: "The concept of retirement is evolving all the time, and we know many people aren't prepared. But now we know by just how much.
"People are living longer, through tougher economic times, but their expectations about their standard of living in retirement remain unchanged. They are putting off the inevitable, which is the reality of significant cuts to their living standards in their twilight years, after their savings run out."
More than a third of people said they were doing nothing to prepare for retirement and a further third said they were not adequately preparing.
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'People need to think about the life they want and what they need to do to have that'
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Feb 20, 2013|
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