Almost four in 10 affluent women approaching retirement are unsure how to turn their pensions and investments into a regular income, according to research from Rathbones.
The survey found that 38% of women nearing retirement were uncertain about generating an income from their accumulated wealth, compared with 19% of men.
Rathbones, the wealth and asset management company, surveyed more than 2,000 UK adults with at least £250,000 in investable assets. It described the transition from accumulating wealth during working life to spending it in retirement as the “Great Decumulation Challenge”.
More than a third of women surveyed, at 35%, did not believe their retirement income would allow them to live well, compared with 22% of men.
The findings indicated that many investors were unsure how much they could afford to spend, how long their wealth would need to last and how to balance their present lifestyle with longer-term financial security.
Almost half of respondents, at 47%, had not taken formal financial advice about retirement.
Camilla Stowell, chief executive officer of wealth at Rathbones, said: “The mental shift from spending years building a retirement nest egg to drawing on that wealth to generate a sustainable income that could last 20, 30 or even 40 years can feel like a leap of faith.
“Individuals are increasingly responsible for making complex decisions around pension drawdown, investment risk, tax planning and longevity, increasingly without the certainty previous generations enjoyed from defined benefit pension schemes, which guaranteed an income.
“Our research suggests women are finding this transition particularly challenging. In our conversations with clients, we regularly hear concerns about making the wrong decisions, withdrawing too much too soon, or being overly cautious and depriving themselves of experiences they can comfortably afford.
“Striking the right balance between enjoying retirement today and preserving financial security for tomorrow is one of the biggest financial challenges many retirees face.”
WOMEN LESS CONFIDENT ABOUT RETIREMENT PLANS
Among respondents who had not retired, 34% of women did not believe they were on track to achieve the retirement they wanted, compared with 20% of men.
Almost a third of women, at 32%, did not have a clear idea of the income they would need in retirement, against 20% of men.
Financial security was among the three leading retirement priorities for 50% of affluent investors. Maintaining a desired lifestyle, including travel, hobbies and discretionary spending, was selected by 38%.
Stowell said: “For many people, the fear of running out of money is greater than the desire to spend it, even among the affluent. Our research shows that wealth alone does not always create confidence, and that anxiety is particularly pronounced among women.
“Retirement should be about enjoying the freedom that wealth can provide. Yet many people struggle to make the shift from accumulating wealth to using it confidently.
“Effective planning and advice can provide the reassurance needed to spend with confidence while maintaining long-term financial security.”
More than half of respondents, at 53%, had sought formal financial advice about retirement. The principal benefits cited included peace of mind, a better understanding of what to plan for and greater clarity about the income they were on track to receive.
