The missing piece of the puzzle: Only one in three near-retirees plans to rely on their savings to supplement their income

The missing piece of the puzzle: Only one in three near-retirees plans to rely on their savings to supplement their income.
 

• Only 34% of near retirees state savings accounts will supplement their retirement income
• Just 18% think long-term fixed rate savings could provide regular income
• Whilst 77% agree savings accounts are important to retirement strategies

 
Pre-tirees (55-68 year olds) are neglecting the important role savings accounts could play for their retirement pots with just over a third (34%) planning on using cash savings to supplement their retirement income, according to new research from Shawbrook.

Despite this, there seems to be wider awareness of the role savings can have to play,  77% agree that a savings account is important to their overall retirement strategy, of which 34% say it is very important and 43% confirm it is somewhat important.

The research also found that there is confusion of which products to use. Just over  a quarter (28%) of 55-68 year olds think savings accounts can provide extra, guaranteed income on top of their retirement pot and it seems that a mere 18% know long-term fixed rate savings could provide a regular income stream for retirement. With longer term fixed accounts currently offering rates in excess of 4%, they could prove to be the missing piece  of the retirement planning puzzle – but savers need to act quickly to grab these rates.

The research also found, nearly one in five (19%) plan to use their regular savings and the monthly interest payments to provide an income whilst 10% will use a mix of a lump sum and also monthly income. With 28% planning on not touching their regular savings and wanting to keep them for a rainy day.

 
Adam Thrower, Head of Savings at Shawbrook, comments: “Utilising long-term savings accounts now and in retirement is crucial for bolstering retirement income. Despite awareness of their importance, too few near-retirees plan to use these accounts. Savings can provide financial security, flexibility, and a buffer against uncertainties.

Retirement planning is like a puzzle, with each piece representing essential financial strategies. Savings are a critical yet often overlooked piece. Remember this key component as you plan for your future.”