Employees aged 55 to 64 plan to spend a larger amount of their retirement income in the immediate years after they retire, according to research by Investec Wealth and Investment.
Its research, which surveyed 985 people aged 55 to 64, found that 70% of respondents plan to spend their retirement funds on holidays and travel in the first ten years of retirement.
A further 38% plan to spend money on home improvements compared to more than a third (35%) who plan to eat out more and 26% that want to buy a new car.
More than a half (52%) of near-retirees are not planning to restrict their retirement spend in order to have sufficient funds to cover the cost of long-term care.
But nearly three-fifths (59%) believe they will reduce spending further into retirement when they are less willing and able to undertake activities such as overseas travel.
However, just 13% of respondents believe the new flexible retirement options announced in the Budget will encourage them to spend more during the first few years of retirement.
Meanwhile, 82% of respondents plan to take a cautious approach to spending in retirement.
Nick Gartland, senior financial planning director at Investec Wealth and Investment, said: “It is good to see that the majority of people are looking to take a sensible approach to retirement saving and spending given the profound changes announced in the March Budget.
“If you save regularly throughout your working life you are unlikely to blow your savings in one go or too quickly, which is good to hear.
“Notwithstanding, there remains a need to be very careful how employees invest and spend, given the changes and the new freedoms people now have.
“The important things about retirement are to save as much as you can, and then enjoy yourself. Saving prudently in the right assets and for the long term remain fundamental to a successful retirement investment strategy.”
