Most people have a lot of different financial commitments and life can feel a bit like a financial juggling act. It can seem like saving in to a pension is just putting money away for the long-distant future – but putting your pension at the forefront of your financial goals makes good sense.
The earlier you start saving into a pension, the more time your investment has to grow. People are living longer, meaning that your retirement could span multiple decades – and therefore cost you more. So, what can you do to avoid retirement remorse later in life?
Don’t fall into pension apathy
It’s all too easy to put your pension firmly at the back of your mind while you focus on the now. But drifting into pension apathy and failing to plan ahead could make a substantial difference to your retirement income.
Biting the bullet, sitting down with a financial adviser and coming up with a robust, long-term plan for your pension at an early stage is one of the best investments you can make for your future.
Never too early
In an ideal world, you should start thinking about your pension as soon as you step into the workplace. This will allow you to take advantage of workplace pension schemes and employer contributions, as well as tax relief on all contributions at the highest rate of Income Tax you pay (subject to annual and lifetime allowances).
Don’t rely solely on the State Pension
The full new State Pension is £175.20 per week, but government statistics show that the average retirement income was £320 per week (after housing costs) in 2018-19, or around £16,640 per year. This means that retirees are increasingly having to use private pensions, both workplace and personal, to bridge the gap.
A survey of Which? members in April 2020 suggested that individuals were spending £19,000 per year to enjoy a comfortable retirement and £30,000 per year for a luxurious retirement, couples were spending
£25,000 per year to enjoy a comfortable retirement and £40,000 per year for a luxurious retirement – meaning there is still a shortfall between the average retirement income and what is needed to maintain the lifestyle to which you’re accustomed once you stop working.
Don’t leave yourself with a shortfall in retirement. You’ve worked hard and will want to live out your retirement years in comfort! That’s where we can help. Come to us and we’ll assist you in drawing up a long-term plan for your pension, so you can enjoy the retirement you deserve.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.