People prefer to spend their money rather than leave an inheritance, however those that receive an inheritance plan to use that money to fund their retirement, according to a new report by HSBC.
HSBC’s research identified four actions which may help today’s retirement savers plan a better financial future for themselves.
With 53 per cent of retirees unable to realise at least one of their aspirations since retiring, HSBC urges retirees to be realistic about their retirement aspirations.
The report found that 47 per cent of working age people plan to semi-retire before fully retiring, which suggests that people need to review their long-term working plans.
HSBC warned that providing financial support for family members may be a reality through working life and into retirement.
It found that 57 per cent of working-age people and 50 per cent of retirees provide regular financial support to at least one other person.
Lastly, HSBC urged people to have a clear retirement plan in place.
It found that 54 per cent of working-age people who have received or expect an inheritance believe it will fully or partly fund their retirement however only 33 per cent of all working-age people have received an inheritance.
The report also found that 26 per cent think it is better to spend all your money and create your own wealth, while just 5 per cent say that it is better to save as much money as possible to pass onto the next generation.
Caroline Connellan, head of wealth at HSBC UK, said: “This report shows that withdrawals from the bank of mum and dad may actually be affecting the standard of living of many retirees.
“New pension freedoms have made savings more accessible, but people should carefully consider the right balance between helping their family and making sure they have sufficient income through retirement.”
Ms Connellan added that the report shows that working-age people should not pin their hopes on funding retirement with an inheritance.
She said: “It is more important than ever that people of all ages make plans about how they’ll fund their retirement, so they can live the lifestyle they want to. Many will benefit from seeking financial planning advice when making these decisions.”
“Even the smallest amount saved today can contribute towards the lifestyle you want in retirement and the legacy you hope to leave. Those who fail to plan may find that any kind of inheritance is not only unlikely but also that a comfortable retirement is beyond reach.”
ruth.gillbe@ft.com
