Client
Portal

Reliance on Defined Benefit pensions among over-50s

Back to News & Views

Diverse avenues through which individuals plan to supplement their retirement income

Recent research reveals that a significant proportion of individuals over 50 years old anticipate relying on secure income sources, such as Defined Benefit (DB) pensions, for their retirement funding[1].

However, the State Pension emerges as the most pivotal component of retirement planning, with three-quarters (73%) of this demographic identifying it as their primary income source. This data underscores the State Pension's integral role in the financial security of retirees.

Transitioning pension landscapes

The study further elucidates the shifting dynamics of retirement income, indicating a gradual decline in the accessibility of DB pensions across successive age groups.

Specifically, individuals over 80 and 70 years old rely more on DB pensions than their younger counterparts in their 60s and 50s. This trend highlights the evolving nature of pension schemes and the increasing need for diversified retirement planning strategies.

Diverse sources of retirement income

Moreover, the research sheds light on the diverse avenues through which individuals over 50 plan to supplement their retirement income. While DB pensions contribute significantly to the retirement funds of older retirees, other sources such as general savings, investments and Defined Contribution (DC) workplace pensions also play crucial roles.

The findings reveal the average contributions of these various income sources to retirees' overall financial landscape, illustrating the multifaceted approach to retirement funding in today's context.

Exploring alternative income streams

In addition to traditional pension plans and savings, the study points to alternative strategies retirees employ to finance their post-work lives. Notably, some individuals over 50 leverage assets such as investment properties and expect financial support from family members to bolster their retirement income.

These findings underscore the creative solutions that retirees are adopting in response to the diminishing prevalence of guaranteed DB pensions.

Navigating pension complexity

The complexity of pension planning is growing, as evidenced by the reliance on a broad spectrum of income sources and the challenges associated with the State Pension. With nearly a third of individuals over 50 expressing uncertainty about optimally using their savings for retirement, the need for clear guidance and strategic financial planning becomes increasingly apparent.

As the landscape of retirement planning continues to evolve, navigating the myriad options for securing a stable retirement income can be daunting. Professional advice offers valuable insights and direction if you require further information or wish to explore personalised strategies to maximise your retirement savings.

Do you want to discuss how to achieve a secure and fulfilling retirement?

If you need professional expert guidance on pension planning and retirement income strategies, please do not hesitate to contact us. We are here to help you achieve a secure and fulfilling retirement.

Source data:

[1] The research was commissioned by Standard Life and conducted by Opinium, with a nationally representative sample of 2,000 over 50 years old, between 6–14 March 2023.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

DIVORCE PLANNING IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

Book your FREE, no obligation discussion today. Schedule Appointment

Sign Up to our mailing list - Receive regular news, tips and financial commentary from the Gemini Team.

Latest News

  • In an era where the lines between work and personal life are increasingly blurred, a new study sheds light on a concerning trend among UK employees. Despite advancements in workplace policies and a growing emphasis on mental health and wellbeing, a significant number of workers are still pushing themselves to work even when they are not in full health. [...]

  • A recent study suggests that a substantial proportion of Generation Z, born from 1996 to 2010, view property acquisition as their principal avenue to amass wealth for their retirement years [1]. This perspective is slightly more prevalent within this demographic than the reliance on pensions, with 33% of Gen Z individuals planning to utilise property as a retirement fund compared to 30% who favour pensions. [...]

  • Recent research has uncovered that a staggering 51% of adults in the UK have neither penned a Will nor are they in the process of doing so[1]. This statistic encompasses 13% of individuals affirmatively declaring no future plans to undertake this task. Alarmingly, a significant portion of the older demographic, with 30% of those aged 55 and above, also finds themselves without a Will, including 9% who have decisively chosen not to create one. The primary deterrent for many is the perception of insufficient assets or wealth, cited by 26% of respondents, indicating a widespread misconception about the necessity of a Will. [...]

  • A recent study reveals that a considerable proportion of UK adults, including a significant number nearing retirement, find themselves in a quandary regarding their State Pension entitlements and the commencement of their payments[1]. The research underscores that 31% of Generation X individuals (ages 42-57) are in two minds about their retirement timing, in stark contrast to 19% of Baby Boomers and the older cohort (58 years and above). Moreover, a notable 24% of UK adults confess to being unsure about their retirement timing, with 27% of women feeling less confident compared to 21% of men. [...]

  • In recent times, a significant portion of retirees, specifically 14% of those aged over 55, have found themselves re-entering the workforce, driven by the inadequacy of their pensions to meet rising living costs, according to new research[1]. This phenomenon, further compounded by an additional 4% contemplating a return to employment, highlights a growing trend among older generations striving to sustain their standard of living in retirement. Notably, this trend is more prevalent among men, with 16% returning to work compared to 12% of women. [...]

  • Inheritance Tax (IHT) represents a significant consideration for anyone looking to pass on assets to the next generation. As of the 2024/25 tax year, IHT incurs a 40% charge on the portion of an estate exceeding the nil rate band of £325,000, excluding transfers to a spouse or registered civil partner. [...]

  • Recent research has uncovered that a staggering 51% of adults in the UK have neither penned a Will nor are they in the process of doing so[1]. This statistic encompasses 13% of individuals affirmatively declaring no future plans to undertake this task. Alarmingly, a significant portion of the older demographic, with 30% of those aged 55 and above, also finds themselves without a Will, including 9% who have decisively chosen not to create one. The primary deterrent for many is the perception of insufficient assets or wealth, cited by 26% of respondents, indicating a widespread misconception about the necessity of a Will. [...]

  • UK retirees are encountering significantly smaller pension pots than they had anticipated, with a considerable number expressing regret over not having commenced their savings journey earlier in their careers. New research has identified a disturbing trend: the average pension pot amounts to merely £131,000[1]. This figure falls short by £119,000 for individuals who had envisioned amassing a nest egg of £250,000. Such a shortfall can drastically alter the retirement lifestyle of many pensioners. [...]

  • A recent study has spotlighted women and investing, offering critical insights that aim to empower women to take the reins of their financial destinies and forge paths toward a prosperous future. Notably, an impressive majority of women (68%) engage in investment activities at least once a month, with over two-fifths (42%) diligently monitoring their savings and investments via online platforms or apps at least once weekly[1]. [...]

  • Recent research reveals that a significant proportion of individuals over 50 years old anticipate relying on secure income sources, such as Defined Benefit (DB) pensions, for their retirement funding[1]. However, the State Pension emerges as the most pivotal component of retirement planning, with three-quarters (73%) of this demographic identifying it as their primary income source. This data underscores the State Pension's integral role in the financial security of retirees. [...]

  • Inheritance Tax (IHT) represents a significant consideration for anyone looking to pass on assets to the next generation. As of the 2024/25 tax year, IHT incurs a 40% charge on the portion of an estate exceeding the nil rate band of £325,000, excluding transfers to a spouse or registered civil partner. Additionally, introduction of the main residence allowance in 2017, offering an extra £175,000 relief when a primary residence is bequeathed to direct descendants or where an individual has moved into a care home, enables individual allowances to reach £500,000 before IHT applies cumulatively. [...]

  • Individual Savings Accounts (ISAs) offer a versatile and tax-efficient way to save for the future, whether for yourself, your children or grandchildren. Now that we have entered the new financial year, on 6 April 2024, significant changes to ISAs have been introduced. [...]

Gemini Wealth Management Ltd is Authorised and regulated by The Financial Conduct Authority Registered in England & Wales No. 5919877 Registered Office: Gemini House, 71 Park Road, Sutton Coldfield, West Midlands B73 6BT The Financial Conduct Authority does not regulate tax and trust advice, will writing and some forms of buy to let mortgages. The guidance and/or advice contained in this website is subject to regulatory regime and is therefore restricted to those based in the UK.

Website by Mellow Marsh Software
© Gemini Wealth Management Ltd
Important Documents | Cookie Policy