5 February 2014
Around half of adults surveyed in the West Midlands admit they use or plan to use the basic state pension to fund post-retirement leisure activities
Whether it’s going on a round the world cruise, lazing on an exotic beach or visiting the Northern Lights, nearly half (47 per cent) of adults in the West Midlands rely or plan to rely on the basic state pension of up to £110.15* per week to fund their post-retirement leisure activities according to new research¹ from Nationwide Building Society.
Other source of funds
While the state pension is still seen as the primary source for post-retirement leisure activities, those polled state they also use or plan to use other forms of finance such as:
- money in a current account or savings account, including ISAs (47 per cent of adults in the West Midlands);
- the cash lump sum claimed from a private pension (26 per cent);
- an annuity (26 per cent);
- money from property, such as rent from properties or downsizing (14 per cent)
- inheritance from other people, such as family and friends (11 per cent)
In addition, more than one in five (22 per cent) adults in the West Midlands plans to continue or have continued working part-time during retirement in order to fund any leisure activities.
Popular retirement activities
The study reveals that seeing the Northern Lights is one of the most popular aspirations with more than two in five (43 per cent) adults in the West Midlands admitting they would like to visit Northern Norway.
A seven-night Northern Lights break to Lapland costs around £1,000² per person half board, including many activities such as a snowmobile ride and a husky safari. If this trip was to be funded purely from the basic state pension, it would require someone to save up their entire state pension for a minimum of nine weeks.
People’s reliance on the state pension in retirement could in part be down to a lack of financial planning earlier in life. Our survey highlights that, in the West Midlands, more than a third of people (34 per cent) who say they plan to retire have not started planning for it yet.
Rob Angus, Nationwide’s head of protection & investments, comments: “Our research suggests a misguided view that the basic state pension will be sufficient to fund life in retirement. If that is their only source of income, retired people are unlikely to have enough to achieve the lifestyle that they hope for.
“More than one in five (22 per cent) people in the West Midlands also admit they plan to continue working during retirement. However, as most people are unlikely to work forever, they cannot generate income for themselves forever.
“This is why planning and saving for retirement is vital. In fact, it is one of the most important financial steps people will ever make, which is why it is concerning that around one quarter of UK adults have not started planning for retirement. It is certainly something that can never be started too early. The longer it is left, the more disastrous the outcome for people’s finances and the tougher those older years are likely to become.”
Notes to editors:
¹ All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,305 adults, of whom 177 are retired or plan to retire in the West Midlands. Fieldwork was undertaken between 14th - 16th October 2013. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
² As of 4 February 2014: http://www.transun.co.uk/northern-lights?depID=1678
About Nationwide Building Society
Nationwide is the world's largest building society as well as one of the largest
providers and a top-three provider of
mortgages in the UK. It is also a major provider of
Customers can manage their finances in a branch, on the telephone, internet and post. The Society has around 15,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.