Almost a million wealthy retirees in the UK plan to work part-time rather than raid their pension pots, despite new freedoms allowing them to do so from April 6, according to a report from RetireEasy.co.uk, the independent, free financial planning tool for those in or nearing retirement.
Offering unprecedented insight into the finances of the UK’s pre-retiree and retiree millionaires, The RetireEasy Fret-free Retirees Report showed that many plan to live on an income of at least £43,000 (€60,000) per annum in retirement after tax. This will consist of approximately £23,500 (€32,500) in part-time wages, supplemented by their pension, savings and investment returns.
It seems these retirees are in no rush to liquidate their pension assets, despite greater freedom to do so. The RetireEasy report showed that almost three-quarters of the Fret-frees (71%) do not plan to take their pension benefits earlier than expected. Once retired, they do plan to withdraw £23,000 (€32,000) per annum from their SIPP/SASS (less than 6% of the total funds available) and almost two-thirds (61%) plan to spend this income on luxury items such as a kitchen, cruise or car.
However, with assets conservatively valued at £1.5 million (€2 million) on average (including home equity), the Fret-frees may be underestimating how much cash they will have to enjoy the high life in their retirement, according to RetireEasy, which estimates a budget of up to £77,700 (€107,000) per year is easily achievable for the average Fret-free.
Richard and Naomi Collinson, Co-Founders of RetireEasy.co.uk, said: “Even after taking a holistic view of their assets and liabilities, the real issue is they may have taken too conservative a view of their income, meaning they could spend a great deal more per year on the carefree and exciting retirement they have waited their whole lives to enjoy.”