WHETHER it is going on a round-the-world cruise, lazing on an exotic beach or visiting the Northern Lights, nearly half (47 per cent) of adults in the West Midlands rely or plan to rely on the basic state pension of up to £110.15 a week to fund their post-retirement leisure activities.

That is the finding of new research from Nationwide Building Society. While the state pension is still seen as the primary source for post-retirement leisure activities, those polled state they also use or plan to use other forms of finance such as:

  • money in a current account or savings account, including ISAs (47 per cent of adults in the West Midlands)
  • the cash lump sum claimed from a private pension (26 per cent)
  • an annuity (26 per cent)
  • money from property, such as rent from properties or downsizing (14 per cent)
  • inheritance from other people, such as family and friends (11 per cent)

In addition, more than one in five (22 per cent) adults in the West Midlands plans to continue or have continued working part-time during retirement to fund any leisure activities.

The study reveals that seeing the Northern Lights is one of the most popular aspirations, with more than two in five (43 per cent) adults in the West Midlands admitting they would like to visit Northern Norway.

A seven-night Northern Lights break to Lapland costs around £1,000 per person half board, including many activities such as a snowmobile ride and a husky safari. If that trip was to be funded purely from the basic state pension, it would require someone to save up their entire state pension for a minimum of nine weeks.

People’s reliance on the state pension in retirement could, in part, be down to a lack of financial planning earlier in life. The survey highlights that, in the West Midlands, more than a third of people (34 per cent) who say they plan to retire have not started planning for it yet.

Rob Angus, Nationwide’s head of protection and investments, said: “Our research suggests a misguided view that the basic state pension will be sufficient to fund life in retirement. If that is their only source of income, retired people are unlikely to have enough to achieve the lifestyle that they hope for.

“More than one in five (22 per cent) people in the West Midlands also admit they plan to continue working during retirement. However, as most people are unlikely to work forever, they cannot generate income for themselves forever.

“This is why planning and saving for retirement is vital. In fact, it is one of the most important financial steps people will ever make, which is why it is concerning that around one quarter of UK adults have not started planning for retirement.

"It is certainly something that can never be started too early. The longer it is left, the more disastrous the outcome for people’s finances and the tougher those older years are likely to become.”