ONE IN SIX FEAR THEY WILL NEED MONEY FROM THEIR KIDS IN RETIREMENT
February 23, 2017
- MetLife Real Pension Freedom campaign highlights need for more choices in retirement planning
Forget the Bank of Mum and Dad – nearly one in six parents worry they will have to turn to their children for financial support in retirement, new research* from MetLife shows.
MetLife’s nationwide study found 16% of over-40s with children are concerned that they will need to ask children for financial support as they will not have saved enough for a comfortable retirement by the time they stop work. Instead of bailing out their children they worry they will have to rely on them for financial support.
The research found more than half (56%) of over-40s retirement savers believe they are on track with their retirement savings rising to more than three-quarters (76%) among the over- 55s.
But 30% of over-40s admit they are behind on their retirement saving and even among the over-55s, who are the first generation to benefit from pension freedoms, around 16% admit they have not saved enough yet.
They are being squeezed by a combination of low long-term interest rates and ongoing investment market volatility as well as narrowing choices on retirement income. MetLife is supporting moves to ensure savers understand the choices available to them and has launched a campaign to deliver Real Pension Freedom supported by advisers, with a focus on the valuable role guarantees can play in retirement.
Simon Massey, Wealth Management Director at MetLife UK said: “Parents will have worked hard to support their children so perhaps they should feel entitled to rely on them if they need financial support in retirement.
“However, it is a bit of a role reversal when it’s retired parents banking on their children for money. It will also have an impact on how much the children can save for their own retirement which in turn can cause problems.
“Planning for the long-term and reducing the risk of running out of money in retirement is one of the key challenges for savers. Guarantees can help people approach their retirement with greater certainty and confidence and a Guaranteed Drawdown solution provides the peace of mind that comes with a guaranteed level of income for life in retirement while retaining full access to your money. This can help mitigate the risk of needing to call on children’s help”
MetLife’s study shows just over half of couples (52%) have discussed their retirement plans and how they are going to achieve their retirement saving targets. Around 45% of over-40s couples admit they have never discussed retirement planning.
MetLife’s range of retirement and investment solutions has been designed to meet the need for a guaranteed level of income for life in retirement or a guaranteed capital amount at the end of a chosen term, with flexibility.
MetLife’s Retirement Portfolio, which was designed for pension freedoms, and its stocks and shares ISA Portfolio provide a choice of income and capital guarantees.
Customers can choose from a range of investments to build a personalised plan suited to the levels of risk they are willing to take, while having the choice of a valuable guaranteed level of income for life from age 55 or a guaranteed capital sum at the end of their chosen term.
In addition, the plans offer the potential for customers to increase the value of their guaranteed benefits daily, while enabling savers to start, stop and restart their income to suit their personal needs.
Notes to Editors
- Research carried out by Consumer Intelligence using an online methodology to question 1,141 over-40s. Fieldwork was carried out between August 17th and 29th 2016
- The value of your clients’ investments, and any income taken from it, can go down as well as up and they may get back less than they invested.
- The MetLife Secure Capital Option provides a guaranteed death benefit or amount at the end of a chosen term. If your clients switch out or cash in their investment before the end of this term, they will receive the underlying value of their investment.
- The MetLife Secure Income Option provides a guaranteed level of income for life and death benefit. If your clients switch out or cash in their investment they will receive the underlying value of their investment.
- Tax treatment depends on your clients individual circumstances and may be subject to change in the future, with or without notice.
The references to “MetLife” are general references to the group as a whole and not to specific entities within the group. MetLife in the UK comprises a number of different companies.
MetLife Europe d.a.c. is an Irish insurance company based in Dublin with Dirk Ostijn as Chief Executive Officer. MetLife Europe d.a.c. provides financial products into the UK via its UK branch, of which Dominic Grinstead is the branch manager.
MetLife Europe Services Limited is an Irish services company, which distributes MetLife Europe d.a.c.’s products to Independent Financial Advisers via its UK branch. Key personnel within the UK branch of MetLife Europe Services Limited are Simon Massey, Wealth Management Director, Tom Gaynor, Employee Benefits Director and Claire Oldstein, Marketing Director.
MetLife Europe d.a.c. (415123) and MetLife Europe Services Limited (472359) are incorporated in Ireland and are authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority. The registered address of both companies is 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland and the UK branch address for both companies is One Canada Square, Canary Wharf, London E14 5AA. Website: http://www.metlife.co.uk
MetLife Europe d.a.c. is affiliated with US-based MetLife, Inc. (NYSE: MET), which through its subsidiaries and affiliates (“MetLife”), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.