Retirees with an annuity enjoy greater life satisfaction

So first of all, what does a happy retirement look like? Well, it turns out that the happiest retirees enjoy good health and satisfying close relationships. They value their independence and enjoy filling their time with meaningful activities. 

One consistently key factor to financial wellbeing is financial status. Lorna Shah, Legal & General’s Retail Retirement MD, noted that: 

"The study shows having a predictable income is key to unlocking the other elements of life that make us happy."

Why does financial stability matter so much?

Retirement looks different for everyone. Some people are full-time retirees, living entirely off their retirement income. Others still work part or even full time, but enjoy top ups from their pensions. And of course, what they all choose to do with their time varies hugely.

But over the past three years, there are two experiences that every single retiree has shared. They’ve all had to deal with:  

• High inflation levels
• The cost-of-living crisis

As a result, many retirees are concerned about their financial security. Our research showed that more than one in four of them (27%) say their finances are often or sometimes unpredictable and difficult to keep track of. 

One in five (22%) live on less than the Pension & Lifetime Savings Associations recommended minimum monthly income.

And some positive developments are causing unintended negative consequences. For example, we’re all living longer. That’s great! But it also means that retirement incomes need to stretch further to cover those longer lifespans.

In short, money’s a key factor in later life happiness. As Meik Wiking commented: 

“The study shows that money does indeed matter for happiness. In fact, money plays a crucial role. Being without sufficient resources to make ends meet causes worry and stress and a lower quality of life for people in the UK. That is especially the case for people in retirement. The good news is that there are ways we can improve happiness levels by planning and saving for retirement.”

Our research found that having a stable, guaranteed income can enhance financial confidence, reduce stress, and improve quality of life. 

What are the benefits of a guaranteed income?

The guaranteed annuity income takes away uncertainty and will help manage risks like:

• Poor pension investment returns
• Taking out too much pension cash too soon
• Periods of high inflation

With a guaranteed income, our research shows that retirees will be more confident that their income will cover their essential expenses for the rest of their lives. And that boosts happiness regardless of their income level. 

At this point we should mention our own annuity products, carefully designed to meet individual needs. Our guaranteed income solutions include:

• a guaranteed income for life, with our Pension Annuity
• a guaranteed income for between three and forty years, with our Fixed Term Retirement Plan and Cash-Out Retirement Plan (our fixed-term annuities)

They’re a foundation for happiness in retirement.