Almost half (47%) of adults feel that securing a guaranteed retirement income is a priority when covering essential expenses, according to a study from asset management firm Fidelity Worldwide Investment.
The study, which surveyed 1,014 UK adults over the age of 55, also found that just 39% plan to purchase an annuity.
The research also found:
- Over half (52%) of respondents think that savings and investments will be able to fulfil the role of lifetime secure income.
- 13% believe a reliable source of income for covering basic living expenses is some form of employment, and the remainder (87%) would look to various investment sources or family members.
- 88% of respondents will use their state pension.
- 5% of respondents intend to use a drawdown product in their retirement.
Richard Parkin, head of retirement at Fidelity Worldwide Investment, said: “Retirees quite rightly prioritise guaranteed income as the bedrock of retirement planning. However, it’s clear there is some misunderstanding as to what this constitutes.
“When all else fails, retirees should always know that they can keep food on the table and maintain the roof over their head which can only be achieved with securing a guaranteed income for life. As it stands, only annuities, DB (defined benefit) schemes or the state pension fulfill this criterion.
“Income sources such as savings and investments, employment and other options are great sources of additional monies but they should not be relied upon for covering your essential expenses.
“Once you know the basics are covered, it’s only then that retirees can invest the remainder in a meaningful fashion, taking sensible risk through a diversified portfolio, which will allow them to enjoy their hard earned retirement.”