The research, launched yesterday at a Parliamentary Afternoon Tea at the House of Lords hosted by Baroness Hollis of Heigham, showed that whilst many are prepared to take personal responsibility for educating themselves about retirement, it is the Government followed by their employer who they are most likely to see as responsible for helping them.
While the majority of consumers looked to take responsibility for their own retirement finances, major financial decisions caused anxiety (34%) and worry (31%). Indeed, 26% felt confused and 22% felt overwhelmed – painting a picture of a nation which needs support, education and guidance to step up to the pensions challenge.
This theme was particularly relevant to the equity release market as 43% of consumers said they simply didn’t know if they would consider using this type of product to help finance their retirement.
When you look at why people would not consider equity release, the key issue which emerged was lack of understanding.
Almost a third (30%) did not know enough about the equity release process, 29% wanted to leave their home as an inheritance – not realising that many equity release plans offer this as an option – and 23% didn’t want to go into debt. Even more worryingly, 8% don’t believe that this market is regulated – illustrating the real need for more information in the market.
This is a need that SHIP has clearly identified and is working to address. The need is more pressing that ever as just 13% of consumers say that they have a financial plan for retirement and are sticking to it.
Andrea Rozario, director general of SHIP, commented: “While it is good news that consumers are stepping up to the challenge of preparing for their own retirement, others look to bodies such as the Government and employers to take the responsibility.
“One of the major stumbling blocks appears to be the fact that making major financial decisions causes worry, anxiety and confusion. Indeed, almost half of consumers don’t know whether they will use equity release to help finance their retirement – citing misconceptions and inaccuracies as barriers.
“With just 13% of consumers saying they have a plan for their retirement finances which they stick to this clearly highlights the need to provide people with education and support so that they are able to make informed decisions about their future.”
