New research by MoneySuperMarket has found that many Brits do not have their financial houses in order when it comes to pensions, life insurance and wills.
MoneySuperMarket has studied data from its Prepared for Life tool as well as almost 300,000 life insurance enquiries to learn more about British financial planning habits.
It has found that nearly two-thirds of Brits underestimate how much pension they need, with one in five (19%) saying they could manage with a pension pot of just £50,000 - 81% less than the recommended £262,500.
Most concerning is the number of people aged 55 and over who have not made provisions for their old age. The findings show that:
- Almost half (46%) of over-55s have not yet written a will;
- One in ten in this age bracket don't have a pension at all;
- Three in five over-55s (60%) do not have life insurance.
The results show that 21% of Brits across all age groups don't have a pension, including 17% of those aged 45-54 and 29% of 35-44-year olds.
"It's interesting to see the number of people enquiring about life insurance across different age groups that are yet to prepare their financial futures," said Neal Cross, life insurance expert at MoneySuperMarket. "The importance of life insurance, pensions and wills are often overlooked, which could explain the disparity between the recommended pension pot of £262,500 and how much people believe they'd need to get by.
"Life insurance premiums increase by age, therefore, the longer you wait to get it, the higher your monthly payments are likely to be. Similarly, if you stop paying for life insurance and repurchase it at a later date, your premiums will still go up, purely down to the fact you will be older when reapplying. So, it's recommended to start making your monthly contributions towards your pension as early on as possible making sure your next of kin are covered in the event you pass away."
Written by Rachel Miller.