According to research from Aviva, the top savings advice from today’s retirees to the younger generation is to spend less on expensive life events such as weddings in order to get ahead in later life.
According to research from Aviva, the top savings advice from today’s retirees to the younger generation is to spend less on expensive life events such as weddings in order to get ahead in later life. Not only this, but more than a quarter of those asked also advised the younger generation to have fewer children in order to be more financially secure in their retirement.
As well as slashing the cost of the big day (60%); other savings advice from beyond retirement is to shop around with every penny (57%), drop designer labels (52%), don’t use credit (48%) and spend less on cars (45%).
Despite the old adage that “you should worry less in life”, this advice was only given by one in ten retirees to the younger generation when it came to their finances.
What and what not to chop!
With the average cost of a wedding standing at £18,5001, cutting this cost by half (or more) could provide the happy couple with a significant lump sum to start a pension fund and lay the foundations for future financial security together.
Another potential financial downfall of the young is spending money on designer labels that are often twice the price of non-designer clothing. With the average interest on unsecured debt paid annually by each UK household standing at approximately £2,4672, and a second car costing on average £5,8693 to keep on the road each year, heeding advice from beyond retirement could go a long way to helping the younger generation cut costs and save more towards the future.
Even taking on board some of this advice, and saving a modest amount each month could make a big difference to a young couple’s income in retirement. For example, a 30 year old male saving £150 a month on designer labels, cars and by shopping around and contributing this to a pension instead, could benefit from £4504 income per month, from 65 throughout retirement, in addition to any state pension. His wife saving the same amount from 30 to 65 would enjoy £4154 per month.
| Age now | Retirement age | Contribution | Retirement income per month in addition to state pension |
| Male aged 30 | 65 | £150 per month | £450 increasing in line with inflation |
| Female aged 30 | 65 | £150 per month | £415 increasing in line with inflation |
Clive Bolton, at retirement director at Aviva said: “The voice from beyond retirement is clear. Retirees are advising the younger generation to spend less today to save more for the future. Our findings across all age groups showed that only 8% of consumers felt that they would be at their most financially secure in retirement, with this dropping further to just 2% after the age of 70.
“Despite this stark recognition by the public, many still delay making plans for their later years and perhaps understandably, focus their spending on their day to day life. It is crucial that as well as enjoying their youth, the younger generation also plan for their future.”
Aviva regularly tracks the concerns and finances of those in retirement, through its quarterly Real Retirement Reports.
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If you are a journalist who requires further information, please contact:
Jess Geoghegan: Aviva Press Office: 01904 684128: jess.geoghegan@aviva.co.uk
Tom Wilson: Aviva Press Office: 01904 692053: tom.wilson@aviva.co.uk
Methodology:
This piece of research surveyed 2000 UK consumers in July 2011, including 988 over 50s. The research looked specifically at the advice over 50s would give the younger generation.
Sources:
1 Weddings Day website: www.weddingsday.co.uk
2 Credit Action website: www.creditaction.org.uk
3 RAC Annual Cost of Motoring Index
4 Aviva’s Pension Calculator: www.aviva-pensioncalculator.co.uk/ Figures based on a 30 year old male / female with no existing pension fund and no employer pension contribution, retiring at 65, choosing no lump sum, and choosing annuity income which increases with inflation.
Notes to editors:
Aviva is the world’s sixth largest* insurance group. We provide 44.5 million customers with insurance, savings and investment products with total worldwide sales in 2010 of £47.1 billion**.
We are the UK’s largest insurer with over 14 million customers. Our combination of life, health and general insurance is unique in its scale and breadth in the UK market. Customers can choose to buy our products through intermediaries, our corporate partners or from Aviva direct and we have become the partner of choice for many of the UK’s biggest organisations.
We are ranked as one of the UK’s top ten most valuable brands and Aviva Plc are in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index. In 2010 we invested £4.3m into our communities in the UK, which included 1,500 Aviva volunteers giving 24,000 hours for good causes. In addition, our employees gave £600,000 through fundraising and donating. Read our corporate responsibility report at www.aviva.com/2010cr.
Aviva is working in partnership with Railway Children through the Aviva Street to School programme to get children living or working on UK streets back into everyday life. Find out more at www.aviva.co.uk/street-to-school.
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*based on gross worldwide premiums at 31 December 2010.
**at 31 December 2010.