Aegon calls for global collaboration on retirement saving

In the report Aegon highlighted five things for individuals to do now so that they are better prepared for retirement.

One suggestion was to save early and become a "habitual saver" as the research revealed that only 39 per cent of individuals saved regularly.

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Other recommendations included developing a written plan for retirement and creating a back up plan in case of unforeseen circumstances such as not being able to work up until retirement age.

Ricky Chan, director at IFS Wealth & Pensions, said: "Having a backup plan is important because life is not smooth sailing.

"For example a financial planner will typically incorporate various ‘what if’ scenarios, such as a premature death of a spouse and an untimely market crash affecting investments. This prompts a discussion with the client on how they’d respond to cope with these unforeseen events, which in turn better prepares them if the worst game to worse. 

"By going through this process, one would hope that more people become consciously aware of their savings and spending habit, so have a higher chance of being financially independent and live the lives they (and their family) want in future."

The research also found that globally fewer than half (48 per cent) of people have factored healthcare costs into their retirement savings.

But Aegon also found that many retirees (39 per cent) retired sooner than they planned and the main reason for this was ill-health (34 per cent).

The provider recommended changes to lifestyle, such as eating healthily and exercising, as well as continuing education to keep job skills up to date and relevant.

Mr Chan said: "Aegon’s recommendations are very reasonable as they apply the principles behind good financial planning. When clients engage with a good financial planner, it is very important to ‘begin with the end in mind’, which includes asking great questions, listening intently and understanding what the client is looking to achieve to give them fulfilment.

"Essentially this is helping the client to understand the lifestyle they want to live and how much it’ll cost. 

"Simple principles such as ‘paying yourself first’ every month are very powerful at accumulating wealth over time, particularly as the money will benefit from compound interest/growth."

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