• Saving less than 10% of annual income
• Expecting to stop working at age 66
If so you have the greatest need to start thinking seriously about your Retirement Planning strategy according to Scottish Widow’s latest annual UK Pensions report
Scottish Widows commissioned You Gov to conduct an online survey of 2,500 UK adults and have concluded that:
• 55% of people are ‘not saving adequately’, an increase of 1% since 2012.
• 20% are not saving anything for their retirement.
• A significant part of the population is entering old age with an increasing amount of debt
Their statistics also provide some sober reading including:
• To retire at 65 with an annual income of £25,000 a 30 year old will need to save £1,000 a month
• Starting saving at 20 could add 39% on to your retirement income
• Deferring retirement from 65 to 70 could add 43% on to your retirement income.
• Increasing your annual contributions by 3% every 5 years could increase your retirement income by 68%.
If the above facts and figures make you nervous about your own position until time machines are widely available what can you do about it?
This checklist may help:
1) Sense check what provision you do have. Remember small pensions with previous companies.
2) Review your expenditure and prioritise long term savings over short term luxury items.
3) Understand how much investment risk you need to take to get appropriate returns to boost your pension fund.
4) Get a forecast of what State pension you may expect to receive.
5) Remember pensions are not the only source of retirement income (think ISAs, buy to let properties etc).
6) Determine how much income you want/need in retirement.
7) Decide at what age you wish to retire and calculate whether you can afford to retire at that age based on your current position.
8) Claim all the tax relief you are entitled to from your pension contributions (higher rate income tax or corporation tax).
9) Check you are getting the highest employer contribution you are entitled to (you may have to contribute more yourself).
10) If you are married, civil partnered or in a long term relationship and you share your finances include your spouse’s/partner’s pensions too.
11) Have a plan to pay off debts before retirement.
12) Find out if your existing pension plans are still appropriate.
13) Remember that larger pension funds don’t automatically equate to a comfortable retirement. The greater the cost of your planned retirement lifestyle the larger your pension fund will need to be.
14) Make a start, today.
If you would like to discuss your Retirement Planning we would be pleased to help.
We offer an initial meeting at our expense and without obligation. Do get in touch to find out more.