More than a third (35 per cent) of over-45s fear their quality of life in retirement will deteriorate if the government chooses to reduce state pension benefits, according to a poll by Tilney.
As the three main political parties outline their pension promises ahead of next month's general election a survey of 2,007 adults aged 45 plus in December 2016 revealed any cuts in state benefits would be unpopular with 16 per cent of those polled nervous about the impact of possible further increases to the state pension age, something the Labour party’s manifesto has vetoed.
However, while pension protection may be important for older voters, the biggest concern for this pre-retiree demographic is falling ill in their twilight years, a fear shared by 63 per cent of people, suggesting that further support for social care would be well received.
Other major retirement worries revealed by the study focused on economic factors, with two in five concerned that the rising cost of living will erode their wealth in later years and 37 per cent highlighted the effect of sustained low interest rates on their savings.
Last week the Bank of England made the decision to keep interest rates at 0.25 per cent, while this week the Office for National Statistics stated inflation has now hit 2.7 per cent.
One in five (18 per cent) also worry about the impact that Brexit will have on their wealth in retirement, while a quarter said they believed another global recession would reduce the quality of their retirement years.
This is stoking up a fair bit of uncertainty among people nearing retirement age.Andy CowanAndy Cowan, head of financial planning at Tilney, said: “There is no question that we’re living through a fairly turbulent time, both politically and economically, and this is stoking up a fair bit of uncertainty among people nearing retirement age.
"Uncertainty can be a thorn in the side when planning long term financial security, so it is far from ideal that the future of the state pension could hang on the outcome of the general election."
But Chris Daems, director of Cervello Financial Planning, said while most people consider the state pension part of their overall financial plan it is clearly not enough to prevent poverty in old age.
He said: "It is now increasingly important to make their own financial provisions for later life as the longer term demographic trends will force the attractiveness of state pension benefits to continue to reduce."
stephanie.hawthorne@ft.com
