Are you afraid of the stock market?

The following is from an article called "Fear of a stock market crisis is preying on the 'pension freedom' generation living on their investments" by Tanya Jefferies for thisisMoney.co.uk

The cost of living, a stock market crisis and running out of money are dominant financial concerns among retired people, a new survey in Britain reveals.

The results of a study of retirement attitudes among mostly well-to-do savers reflect the major behavioural shift towards people investing their pensions to provide an income in old age, rather than depending on guaranteed payouts from an annuity or final salary pension.

Some 10,000 older people took part in a survey carried out by the Interactive Investor website (II), which probed their views on topics including wealth, inheritance and younger generations.

II says the study blows a hole in the cliched image of retirement that depicts a tanned, silver-haired, smiling couple on a golf course or cruise ship.

Two-thirds of the participants disagreed that retirement was a time of pleasure and financial worries loomed large in the findings.

Holidays and travel, and having more time for friends, family, hobbies and voluntary work, are all top priorities for both men and women – but there are some big secrets too, with half of the couples having no clue how much debt their partner has.

How to protect your retirement income plan in troubled times. The survey made the following findings.

Among retirees, 50 percent are concerned about the cost of living, 42 percent about a stock market crisis, 36 percent about affording healthcare, 35 percent about running out of money, and 24 percent about tax issues.

Meanwhile, for those yet to retire, the top financial concern was running out of money, with 26 percent worried about this, 23 percent about the rising cost of living, and 10 percent about not being able to afford social care - with stock market hazards further down the list at 8 percent.

Leaving an inheritance was the top priority for 35 percent overall, but 26 percent had not written a will, while 25 percent had one but admitted it needed reviewing.

Some 70 percent of retired participants had not set up a lasting power of attorney - an important legal step allowing loved ones to take over your finances if you fall ill - rising to 88 percent among those not yet retired.

More than half of those surveyed did not know how much debt their partner had and almost a third didn't know how much they earned.

But that fitted with many running their finances at least partially apart, some 26 percent of couples keep separate bank accounts, whilst 18 percent have just a joint account and 56 percent have a combination.

The report said that 17 percent of women feel confident about maintaining their standard of living in retirement, compared with 30 percent of men.

However, men are more than twice as likely as women to carry on working in retirement because they enjoy it (34 percent versus 14 percent), while women are twice as likely to stay in work due to financial necessity (41 percent versus 20 percent).

Dealing with financial issues was considered a chore by 34 percent of women compared with 15 percent of men.

Not starting a pension sooner was the biggest financial regret for 17 percent of participants. And among those not yet retired, 32 percent regret not saving enough more generally, and 12 percent that they sat on too much cash instead of investing it.

Lifestyle goals: Having more time for friends and family is one of the priorities for retirement

When it comes to the generational divide, 51 percent said younger generations have a tougher time financially than they did, and 29 percent thought the opposite.

But 66 percent of those without a final salary pension - which provides a guaranteed income in old age - have a vague or no idea about what their income in retirement will be, compared with 44 percent of those who have one.

What does II recommend based on its findings?

The firm is calling on the Government to do the following.

• Tackle inequality early with more dedicated joined up and resourced financial education in schools.

• Combat pension inequality throughout people's lives by introducing pension ‘wake up packs’ not just at 50, but at key life stages such as the start of a new job or birth of a child.

• Get auto-enrolment working better for everyone by lowering the minimum age limit from 22 to 18 sooner rather than later, not the mid-2020s as currently planned.

• Change the qualification rules for the £10,000 auto-enrolment earnings threshold to cover people working for multiple employers, helping those - mostly women - who might have several part-time jobs.

Launch a public education campaign aimed at women to help kick start a savings and investment culture.