A third of retirees will rely on downsizing and inheritance

Financial uncertainty fuels 53% surge in retirement plan searches as 39% remain unaware of pension performance

A recent survey has uncovered significant knowledge gaps in retirement planning among the UK’s wealthiest individuals. Despite the high net worth of the respondents, many are surprisingly unaware about their retirement strategies and pension performance.

To bridge the gap between high-net-worth individuals and their financial providers, Arbuthnot Latham has explored their current retirement strategies, where the need for more information lies, and how to tackle their priority financial planning objectives.

The survey reveals that most of the UK’s most affluent individuals feel confident retiring with a nest-egg averaging just over £900,000 (£900,977) – around £45,000 per annum for 20 years.

What’s more, gender plays a significant role in requirements for financial peace of mind. While affluent women state they require just over £800,000, their male counterparts say they need closer to a million in the bank to feel financially stable.

• Male average: £934,957.26
• Female average: £829,109.264

This aligns with data throughout the survey that suggests affluent women display greater frugality than affluent men. For example, high net worth women are far more prepared than men to reduce personal spending on luxury items and leisure to save for retirement.

With a 53% increase in demand for people searching for “retirement strategies” online, interest in future planning is clear. However, there appears to be a gap between this demand and visibility amongst the UK’s wealthiest over the resources that will be available to them when they retire.

The study uncovered that although 51% of the UK’s high net worth aim to retire at 62, only one in four are aware of the value of their pension. This likely accounts for the rising fears surrounding lifestyle maintenance in later life, shared by over 50% of high-net-worth individuals surveyed. To reduce financial stressors and ensure a comfortable retirement, expert guidance and support on future planning is key. Chris Allen, Director, Wealth Planning, Arbuthnot Latham, said:

“A £900,000 pension pot is a challenging goal for many to achieve, therefore, the earlier you save for retirement, the greater your chance of achieving this objective. The impact of compound investment growth is especially powerful the earlier you save.

Pensions are extremely attractive vehicles from a tax efficiency perspective, which includes the tax reliefs obtainable, to the efficiency of investing within these wrappers. This is a reason pension planning should be a priority.”

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