Millions of Britain's retirees the first five ‘golden years' bring unexpected life change and financial strain, according to research from flexible retirement solutions provider LV=.
Almost a quarter of retirees (24 per cent) said their health had worsened or they had suffered a serious health issue in the first five years of retirement, while 17 per cent said they had needed to unexpectedly dig deep to support family members financially.
Over one in three retirees (34 per cent) celebrated a new grandchild being born within the first five years of retirement. A further one in four ‘new retirees' (25 per cent) moved house within the first five years, and one in five (20 per cent) updated or renovated their existing property or garden, making the most of their extra free time.
"Many people associate retirement with taking things easy and relaxing, however, it’s a time when major step changes in their lifestyle can take place,” said Matt Trott, Head of Annuities at LV=.
"There is so much uncertainty in the world at the moment. People are living longer, they have to deal with new pressures, and their savings are not stretching as far as they would like. In addition, the structure of the entire at-retirement financial services market is under review, so who knows what life will look like in five, 10 or 15 years time?
"Annuities are a great option for those wanting security and a low risk income. However, being locked into a lifetime annuity is not always the ideal option for everyone, particularly for those who are relatively young and in good health. For those in impaired health locking into an enhanced annuity is actually a good thing.
"There are thousands of people coming up to retirement every week, entering the unknown and trying to transition between working and retired life. Many of these people will find themselves in a very different set of circumstances five years down the line, and it could then be too late to change the way they can access their retirement funds.
“Therefore, it's important people make sure they understand all the options available to them, both immediately and later in retirement.
“We would always recommend that people coming up to retirement seek specialist independent financial advice, and always look at the market as a whole before locking themselves in with their pension provider, as they could secure a greater income in retirement elsewhere."
Where the financial strain for new retirees comes from
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Did any of the following happen within five years of retirement?
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2010
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A grandchild was born
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34%
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Moved house
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25%
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Had a serious illness/worsening general health
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24%
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Updated/renovated your property/garden
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20%
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Suddenly need to help family members financially
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17%
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Received an inheritance
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7%
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Widowed/bereaved (partner)
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6%
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Returned to work
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6%
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Relocated to another country
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3%
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Source LV= June 2010
