Britons face entering retirement unprepared thanks to a "dangerous cocktail" of longevity and historically low interest rates, according to research.
The over-50s generation face having to rely on their own resources which, according to new joint research by the London Institute of Banking & Finance (LIBF) and Seven Investment Management (7IM), are likely to run out much sooner than the average person thinks.
The findings, taken from a survey carried out by Opinium among 2,000 UK adults aged 50 and above, raised a "series of warning flags for policymakers as they show a generation approaching retirement dangerously unprepared, with little understanding of the pressures their assets might come under for funding both the essentials and their aspirations in later life".
According to the study, 50 per cent of those not yet retired said they were not well prepared for the day they stop work, while 35 per cent said they worried about how they will manage financially in retirement.
Despite being good at counting the pennies, their caution has meant they stayed largely in cash accounts, meaning they potentially missed out on one of the longest bull markets in history.
Alex Fraser, chief executive of LIBF, commented: “What comes through loudly and clearly from these initial findings is that this is a prudent, waste-not-want-not generation but too many are unprepared for the reality of a retirement that can now stretch out for decades.
"They dream of a long happy retirement that ends with them passing on a nice inheritance to their children but the reality for many could be painfully different. For many, their properties are the main thing that stands between them and hardship in their later years, but downsizing or equity release isn’t yet on the radar.”
When it comes to taking financial advice, the study showed 77 per cent were not currently being advised, while 56 per cent said they had never had advice.
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Moreover, 35 per cent were adamant they would never consider getting advice - despite 44 per cent of those surveyed admitting they do not have enough knowledge to make the best decisions, and 41 per cent claiming they did not feel confident enough to make decisions without seeking advice.
Justin Urquhart Stewart, co-founder and head of corporate development for 7IM, said: “This generation has been badly let down by a perceived absence of affordable financial advice and a lack of financial education.
"Many people have been cautiously squirreling their money away into cash savings products at the time when they could have been thinking about investment risk and the power of compounding returns."
He added that while investment risk might not be for everyone, too much caution can cost - especially as inflation has outstripped cash returns.