Over 55s Changing Their Retirement Travel Plans

Personal pension provider True Potential’s Tackling The Savings Gap Q3 2016 report suggests that over 55s are changing their plans for retirement.

Retirement

For years, the round-the-world trip has been the ultimate retirement dream, yet it seems that plans are changing, especially for over 55s. In the Q3 2016 True Potential survey, just 2% of over 55s said they would spend their 25% tax-free lump sum from their pension on a round-the-world trip. This could be a result of the reality of over 55s’ pension savings.

On average, at retirement, 55 year olds have a pension pot for £51,446, delivering a 25% tax-free sum of £12,900. However, a mid-range ticket on a 120-day Miami to Miami world cruise costs around £48,000* — almost the entirety of the total pension savings and over three times the tax-free amount.

Based on their tax-free amount, the average 55 year old could afford a 35-day trip, travelling halfway across the South Pacific. This is based on a single traveller; if they plan on travelling with their partner, the trip gets even shorter — from Panama Canal to California.

qimono / Pixabay

Likewise, over 55s are changing their attitudes to holidays in general. Just 10% said they would take regular holidays in retirement. Perhaps the reality of their pension potential has caused many 55 year olds to rethink their plans.

In contrast are 24-34 year olds, who remain optimistic about their retirement possibilities. In the same survey, a quarter of the age group said they would spend their 25% lump sum on a round-the-world trip. Similarly, 34% said they would take regular holidays once retired.

These attitudes underline a disparity between retirement expectations in different age groups. As they are further from retirement, perhaps 24-34 year olds aren’t as aware of the reality of their pension pots as over 55s, who are nearing retirement age and understand the limitations they face. Only time will tell if the retirement attitudes of 24-34 year olds will change as pension age creeps closer.

* Based on brochure price of a 120-day cruise with Oceania, staying in an ‘Ocean View’ room

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