Almost a third of pensioners (31%) admit that most days for them are ‘No Spend Days’ when they don’t spend any money on themselves. And three in ten (30%) say they spend less than £10 a week on themselves, with more than half spending less than £20, according to a poll by equity release specialist Responsible Equity Release.
The top reasons for having ‘No Spend Days’ include worrying that they would drain their pensions too quickly (55%), and spending any spare cash they have, after bills and food, on family (27%). When asked whether their spending habits had changed since retiring, nine out of ten (89%) respondents said they had definitely become more frugal with money.
Just under half (45%) of those polled resented that they were obliged or felt pressurised by their families to help out. More than two thirds (68%) of respondents admitted that supporting their family had left them struggling for money, and not able to fully enjoy their retirement.
Responsible Equity Release polled more than 1,500 pensioners aged between 55 and 65, about their spending habits in retirement and how the pension freedoms had changed their behavior towards their investments. Those retirees polled hadn’t converted their pension funds into an annuity.
Respondents said that they have become more aware, even obsessed, with their financial situation, since the new pension freedoms. Eight out of ten (80%) said they check their investment portfolio more often now, with 30% admitting they have become obsessed by how well their pension/investments are performing, worrying constantly that they might be losing money.
Around half (51%) said they are more interested in their investments now they have more control. However, more than half (55%) of respondents admitted that their obsession with how their pensions are performing had impacted on their enjoyment in retirement, and 30% now wish they’d paid into an annuity.
With mobile apps enabling people to check how their pension and investments are performing while on the go, are we becoming a nation of investment junkies? Three quarters (75%) of those polled said they now check their investments every week, and a quarter (25%) admit they login to get a performance update at least every other day.
Six out of ten (60%) respondents confessed they had checked the performance of their investments while out at dinner with their husband or wife, more than half (55%) while at the breakfast table, 48% on holiday or by the pool, 43% out with friends, 40% at the pub and 40% while in bed. One in ten (10%) even admitted checking their pensions while sitting on the toilet.
Steve Wilkie, managing director, Responsible Equity Release, comments: “Clearly pension freedoms have changed the way many people view and manage their investments. We are more aware now than we’ve ever been of how well our pensions and investments are performing, because we need to be.
“It’s good to see that people are financially engaged, however, the danger is that awareness can quickly turn into an obsession that takes over your life. The results suggest many are concerned about outliving their money, and as a consequence are worried about spending.
“It’s important to find a balance between living an active retirement, achieving your long-term goals and ensuring you have enough money for the future; otherwise the golden years of retirement could pass you by.
“Although annuities have received a considerable amount of bad press over the past couple of years, what they do offer is a regular, guaranteed income for life, enabling people to get on with enjoying their retirement without having to worry about how well their investments are performing. Many people will still choose the annuity route simply for that reason alone.”
