The report from RetireEasy shows that these retirees plan to live on an income of at least £43,000 per annum in retirement after tax. This will consist of approximately £23,500 in part-time wages, supplemented by their pension, savings and investment returns.
They will not be in a rush to liquidate their pension assets next month - almost three-quarters (71%) do not plan to take their pension benefits earlier than expected. Once retired, they do plan to withdraw £23,000 per annum from their SIPP/SASS (less than 6% of the total funds available) and almost two-thirds (61%) plan to spend this income on luxury items such as a kitchen, cruise or car.
However, with assets conservatively valued at £1.5m on average (including home equity), they may be underestimating how much cash they will have to enjoy the high life in their retirement, according to RetireEasy, which estimates a budget of up to £77,700 per year is easily achievable for the average "fret-free".
The assets of the average "fret-free" retiree include:
- A home value of £658,000.
- Private pension value of £146,000.
- Bank balance equals £69,000.
- ISA balance of £67,000.
- Personal investment balance of £146,000.
- SIPP/SASS value of £407,000.
- Total assets: £1,493,000.
In good news for the current Government, the vast majority (84%) believe the new pensions freedoms to come in on April 6 are a ‘good idea’. Interestingly, this may be simply a theoretical view as the vast majority of them at 71% do not have any plans to take advantage of the new freedoms announced by the Chancellor in his recent Budget. Nearly two-thirds (65%) said they do not plan to sell their existing annuity, while 72% are not concerned about the lowering of the Lifetime Allowance.
Richard and Naomi Collinson, co-founders of RetireEasy.co.uk, said:
“The message here is clear: the Fret-free retirees will not be rushing out to cash in their pensions next month due to the Aladdin’s cave of investments, homes, pensions and cash at their disposal. Even after taking a holistic view of their assets and liabilities, the real issue is they may have taken too conservative a view of their income, meaning they could spend a great deal more per year on the carefree and exciting retirement they have waited their whole lives to enjoy.”
