Over a third of over-75s have no private pension wealth to fund their retirement as access to private savings falls with age, according to Bower Retirement Services’ research.
The equity release adviser’s analysis of the Office of National Statistics’ wealth and assets survey showed 34 per cent of those aged 65 to 74 have no private pension wealth, a figure which increases to 37 per cent as people move into later life.
The median private pension wealth held by over-75s is £43,200 - compared with £108,400 for retired people aged between 65 and 74.
The figures show average private pension wealth peaks at £135,900 in the run-up to retirement, when savers are aged between 55 and 64, but then gradually declines in the early years of retirement and then more rapidly as savers become older.
Recent research from Prudential confirmed that more than one in seven of those planning to retire this year have no pension savings and will either be totally or heavily dependent on the state pension, as their only source of regular retirement income.
Bower urged homeowners to take financial advice in order to be able to assess all their retirement income options, including accessing property wealth.
Andrea Rozario, chief corporate officer at the firm, pointed out that the pension freedoms bring increased flexibility, with savers able to control their own money, but running the risk of leaving themselves without enough when they might need it for care or home adaptations.
“Property wealth can play a major role in helping people to fund retirement and can be accessed tax-free in a variety of ways including downsizing. Advice is critical as lots of options with both pros and cons need careful consideration.”
The analysis also revealed that median pension wealth has been growing steadily, with government data for 2008/10 showing those aged 75 and over had pension wealth of £40,600. More people have more private pension wealth compared with 2008/10 – 61 per cent of over-75s had pension savings then compared with 63 per cent now.
peter.walker@ft.com
