deVere Group raises alarm over ‘head in the sand’ attitude to pensions

Only 14 per cent of 40-60 years olds in South Africa feel confident that they will be financially secure in retirement, a new study by the deVere Group has found.

Yet alarmingly, only 15 per cent of this age bracket, many of whom are on the cusp of retiring, are currently seeking any kind of financial planning advice. Indeed, nine out of 10 of the 50-60 years surveyed hadn’t spoken with a financial advisor in the last three years.

The report from the world’s largest independent advisory firm also shows that “not having enough income” was the biggest concern about retiring for 100 per cent of all the 40-50 year olds. Similarly, half of all participating 50-60 year olds feared “becoming dependent on others” in their golden years.

In addition, a whopping 78 per cent of 40-50 year olds and a third of the 50-60 age group felt that inflation would be most likely to affect their pension schemes.

Nigel Green, chief executive of the deVere Group, comments: “The survey results illustrate a shocking lack of awareness and planning and, as a result, people are risking hardship in the future by ignoring financial planning today – this despite their own very real fears about how they are going to fund themselves when they finish working.

“For example, it is disturbing that whilst people are, justifiably, fretting about the adverse effects of inflation on their retirement funds, most are still not actively seeking any kind professional financial advice on this issue. Burying your head in the sand is, financially, the worst thing you can do.”

He continues: “Some of the respondents have started planning and they are the ones who are more likely to benefit from a wealthy retirement. However, far too many are still assuming that the state will provide or simply have a lack of knowledge on retirement incomes.

“Over the last few years the world has changed and with an ageing population and declining state and occupational pensions, it’s vital that people take responsibility for securing their own financial freedom.

Mr Green urges people to be more proactive, especially in these economically turbulent times. He says: “With the markets behaving in such a volatile manner in recent years, it is even more important that you review your pension provisions on a regular basis. By failing to do so, you could be condemning yourself to a poverty-stricken retirement.”