The Retirement Nation is the fastest-growing sector of the UK population. It has enormous influence on our society. But to help it, we need to understand more about its diversity, and its hopes and fears for retirement.

Our approach
To understand the Retirement Nation better, MGM Advantage commissioned research which paints a picture of how they live their lives. We wanted to know how much wealth they have, do they understand retirement products and risks, how healthy they are, and how they spend their time. But we also wanted to dig deeper and get a better understanding of how they feel emotionally about retirement – what are their biggest worries, do they have any regrets in life, and what do they feel is the best thing about retirement.

Our aim was to use psychology to break down the Retirement Nation into different types or groups, with different characteristics, which could help us understand better how each person approaches retirement and what their fears and hopes are.

The research was conducted online by Research Plus between 7th and 17th October 2011 with 2086 UK adults aged 55 years and over, of which 1261 were retired and 825 non-retired.

Chapter 1 – Importance of the Retirement Nation
The proportion of older people is growing. This chapter considers the wealth they have accumulated, the power that brings, but also the financial demands they make on our society. We also look at the ‘invisible’ financial contribution to society – our survey shows the UK’s Retirement Nation saves the State and society at least £25 billion a year through unpaid care, community, and voluntary work.

Chapter 2 – Overview of the Retirement Nation
Our research shows that people who make up the Retirement Nation do not believe that UK society treats retired people well. Those already retired want to be described as ‘retired’ or as a ‘senior citizen’, not as an ‘OAP’ or ‘old’. We also examine how retired people spend their time. As well as watching television and indulging in hobbies, 36% of them undertake some charitable or voluntary work.

Chapter 3 – Pressures facing the Retirement Nation
Lack of money and failing health are their two biggest worries. But the Retirement Nation also faces emotional pressures, health pressures – including how to fund long-term care – and financial pressures. They also experience inflation pressures although they may not be aware of it – 19% of non-retired people were not even aware of the negative impact of inflation and 54% did not know of any way to off-set it.

Chapter 4 – Psychology of the Retirement Nation
This chapter explains the different types of people who make up the Retirement Nation and considers the hopes and fears of each group. The largest group is the Comfortable types, who are trying to keep up their living standards in retirement, but it’s a struggle, and they have to be careful with budgeting.

Chapter 5 – How can we help the Retirement Nation?
People need help in preparing for retirement but also in securing a retirement income from a vast array of different products and options – 72% were unaware that certain medical conditions could entitle them to a higher level of pension income through an enhanced annuity. Shopping around for the best retirement income product is important – but 31% had not even heard of the open market option which gives them the right do so.

Psychology Types

• ‘Thriving’ Has both the money and good health to really enjoy retirement, and to do the things they have always dreamed of.
• ‘Aspiring’ Dreams of a better life in retirement but may not be able to achieve it as money hasn’t performed as well as hoped, or health problems may cut down their ability to travel and enjoy hobbies.
• ‘Comfortable’ Enjoys good health, and has enough money to maintain the same lifestyle throughout retirement, as well as treat themselves and their family occasionally.
• ‘Careful’ Independent, self-sufficient, and wants to keep the same lifestyle throughout retirement, but the modest pension, investment and equity they have built up over their working lifetime is making this tough.
• ‘Squeezed’ Income will be less in retirement because of low savings, and they may have to continue working if their health allows.
• ‘Restricted’ Mainly dependent upon the State and possibly family for financial support, they have to budget very carefully and cannot plan ahead.

Chapter 6 – Making it happen – our recommendations
We felt it was clear from the research that change was needed to make sure the Retirement Nation gets the respect and support it deserves. In Chapter 6 of the report we outline our recommendations on how that can be achieved. Everyone has a part to play – us as a nation, the media, the financial services industry and the Government. Working together we can generate real improvements for today and tomorrow’s Retirement Nation. Respect We need to change our attitude towards the Retirement Nation and recognise their individuality and what they contribute to the UK.

Representation
The Retirement Nation is a big part of UK society, not just for what they contribute, but also the help and support they need. The Retirement Nation needs a voice. We recommend the Government creates a Minister for Retirement. Education We need to help people maximise and make the best use of their financial wealth in retirement. The first step is to help people to improve their basic knowledge about retirement and finance. The financial services industry, government, and media all have a role to play in achieving this.

Simple products
Financial services and government need to continue to work together to innovate and design new retirement products that meet the needs of the Retirement Nation and are straight-forward, easy to understand, accessible, and offer good value.

Personal Responsibility
People need to take ownership of their retirement planning – from starting to build up a pension pot in their 20s and 30s, to making the best retirement income decision when they retire.

Click to download the full report.