Biggest long-term financial worry is running out of cash in retirement - Alliance Trust Savings

The Dundee-based platform’s survey of over 1,000 retail investors asked: ‘What is your single biggest worry about your long-term financial future?’

Nearly a quarter (23 per cent) said not having enough money, while a further fifth (19 per cent) said their health and funding care. The risk of high inflation impacting savings was a major concern for 9 per cent of respondents, while 6 per cent feared Government meddling in the form of further changes to pensions or taxation. A lucky 8 per cent had no concerns at all about their financial future.

Respondents were fairly savvy when it came to pension freedoms, with more than half (54 per cent) saying they understood the choices available for their personal pension pot, and a further 35 per cent saying they know a bit about the choices available, but needed to do some more research. Just 5 per cent felt completely clueless about pension freedoms.

The survey also suggests that investors are sensible in their plans for their pension pots, with three quarters (75 per cent) saying their first priority when accessing their savings was funding retirement, while 7 per cent planned to set aside money for care and 3 per cent expected to pay off debt. Only 2 per cent prioritised splashing their cash on a new car, house or holiday of a lifetime.

Brian Davidson, senior pension proposition manager at Alliance Trust Savings, said “As we’re all living longer, planning how to fund our lifestyle once we’ve finished working is a serious consideration, especially as the pension landscape has moved away from state provision and corporate final salary schemes to place more emphasis on individual responsibility through personal and employer contributions. It is encouraging to find that the majority of investors are aware of the pension freedom changes but even with the new flexibility over access, continue to earmark their pension pots for their financial needs in retirement.”