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Sarah Moorhouse, now happily retired, is making the most of her private pension by traveling frequently and enjoying spontaneous experiences. At 64, Sarah and her husband, Geoff, prefer to use their retirement income to savor life rather than save wealth to pass down to their children. Their approach contrasts with many retirees who prioritize building an inheritance for the next generation.
Living in the Yorkshire Dales, Sarah and Geoff take several vacations each year, often visiting locations such as Scotland, Cambridgeshire, the Lake District, and Norfolk. They relish these trips, spending considerable sums because, as Sarah puts it, “you only have one opportunity at life.” The couple recently replaced their classic Sunbeam Alpine sports car with a modern Mazda MX-5, emphasizing their desire to enjoy life’s pleasures while they can. Sarah reflects on the reality of aging, stating, “I’m of an age where I’m going to friends’ and acquaintances’ funerals, and I think you just need to live life and enjoy it while you can, because it’s a very precious commodity.”
This lifestyle mirrors a larger trend observed globally, dubbed “skiing,” which stands for spending the children’s inheritance. This idea challenges traditional assumptions about passing down assets. In the UK, a report from Standard Life reveals that 15% of parents with children of all ages prioritize enjoying their money during retirement over leaving an inheritance. Similarly, in the United States, expectations of receiving an inheritance have declined from 25% to 20% between 2024 and last year, according to a study by financial services firm Northwestern Mutual.
Sarah and Geoff’s two adult daughters support their parents’ choices. Poppy, one of their daughters, is happy that her parents are living life fully and dismisses the expectation of an inheritance, saying, “To me that’s wild. It never even crossed my mind that I’ll get money when my mum and dad die. I’d so much rather them do what they want to do.” Mike Ambery, retirement and savings director at Standard Life, attributes this shift in the UK to the disappearance of final-salary pensions, which guaranteed steady payments for life. Instead, many now depend on defined contribution pension pots that can be depleted. Ambery highlights that retirees want to enjoy some indulgence after years of hard work: “It’s just having a little bit of indulgence to enjoy life. Let’s face it, working life can be very hard for some people.”
While not all retirees enjoy financial comfort—16% of UK pensioners live in poverty, according to the Joseph Rowntree Foundation, with a similar figure of 15.4% in the US—pensioners’ disposable incomes in the UK have increased more than that of non-pensioners over the past 30 years, excluding housing costs, according to the Institute for Fiscal Studies.
Karen, originally from Berkshire, currently resides in Provence, France, where she spends over £10,000 annually on trips. Semi-retired, she supplements her private pension with part-time consultancy and rental income from property. Her travel plans for the year include a yoga retreat and a tour of Vietnam and Laos. Despite her active lifestyle and income, Karen says she isn’t “crazy with money” and appreciates a bargain when she can find one. Like Sarah, Karen does not qualify for her UK state pension until 67, which currently offers just over £12,500 a year but is set to increase soon.
By comparison, retirees in the US receive Social Security retirement benefits, with a maximum annual payment of nearly $50,000 (£37,000) available at full retirement age, which is also 67. However, individuals may opt for reduced benefits starting at 62. Matthew Loveless, a vice president at Northwestern Mutual, advises retirees to have honest conversations with their adult children to manage expectations about inheritance.
Back in Yorkshire, Sarah is already planning another holiday. She reflects on her life with satisfaction: “I’ve worked hard all my life and I think I deserve to have a bit of free time and to be able to do nice things.
Read the full article from The BBC here: Read More
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