When it comes to retirement, there are some ideas that can turn out to be quite different when you examine them closely. We explore five of them.
- You can live off the state pension alone
The current basic state pension is £137.60 per week, or
£179.60 for the new state pension if you were born on or
after 6 April 1951 (for a man) and on or after 6 April 1953
(for a woman). That works out annually as £7,155 or £9,339
respectively, depending on meeting National Insurance
contribution requirements and other eligibility criteria.
This could be enough for those who own their home
outright, to cover the very basics for everyday living but is
limiting for those who want to enjoy a more comfortable
retirement without money worries. As life expectancy
rises, so does the amount of time we’ll need to fund
our lives in retirement, including long-term care
when we’re older. - Matching your workplace pension is enough
With an occupational (workplace) pension, the overall
minimum total contribution is 8%, with employees paying
in 5% of salary and employer contributing 3%. But this
might not be enough to give you the kind of income
you’re expecting once you’ve retired.
The good news is you can back your workplace pension
up by increasing your contributions if you’re able. Better
still, some employers also offer to pay more into your
pension to help build your retirement benefits faster, by
matching any additional contributions you make up to a
set level. If you start the ball rolling earlier, the more tax
relief you’ll receive and the more time your overall pot
will have to grow. - It’s possible to keep working for longer
The reality is, even if you wanted to continue working
either full – or part-time after state retirement age, you
might not be able to do so. It might be too physically
demanding or might not fit in with retirement goals like
spending more time with grandchildren, travelling or
other pursuits you’ve been looking forward to.
Getting help from a financial adviser can ensure you have
your desired level of income in retirement. You’ll then be
able to focus on keeping busy through hobbies, part-time
work or other areas like volunteering in your community. - After a certain point it’s too late to save for retirement
As we’re living – and working – longer than before, while
it’s true that the sooner you start the better, life doesn’t
always go as planned so it’s never too late to start saving
for retirement. Compound investment growth can make a
big difference to the value of your pension over time. - You can save for retirement without help from an adviser
Even with the best intentions when it comes to saving and
investing, doing it alone is difficult. That’s why working
with a professional investment adviser can give you
confidence about the direction of your investments. An
adviser will be able to point out the long-term benefits
of your investments and how they can pay off for you.
Speak to your adviser about making the most of your
pension investments.
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.
