It’s certainly a goal many of us hope to achieve in the future. And thanks to rising life expectancy, there’s a possibility your retirement could last 30 years – or beyond.
There’s no denying this is a positive thing.
But equally, the prospect of living longer could mean your savings may have to stretch that much further. And – to put it simply – last as long as you do.
That’s why it’s really important to plan well – as early as you can.
Call Skipton today for a no-obligation conversation to see if Financial Advice might be right for you on 0345 266 0979 or find out more here
Planning for a more confident retirement, no matter what lies ahead
Aside from rising life expectancy, there are a few other things to bear in mind when preparing for retirement.
1. Inflation (in other words, the rising cost of living).
Over time, the cost of everyday items increases. Products and services you buy now will most likely cost more in years to come.
With this in mind, it’s worth considering keeping your retirement savings in a suitable place – such as a pension or investment – where it has more chance to grow in real terms over a long period. This is providing you’re comfortable with the potential risks involved.
2. The pension freedoms
The pension freedoms provide more flexibility when using your defined contributions pension.
As the name suggests, you can withdraw how much money you want – whenever you want (currently from 55 years old). Having more choice is of course a perk, but it also means you’re at risk of using your savings too quickly.
It’s important to remember that, while you can withdraw the first 25% of your defined contributions pension pot tax free, the rest will be taxed as income. This can eat into your pot if you take too much, too soon.
3. Can you rely on the state pension alone?
The state pension, if you’re able to receive it (and have made enough National Insurance contributions over your lifetime), is no doubt a useful income boost for anyone in retirement.
Yet relying on this solely is unlikely to help you lead a comfortable lifestyle once you’re retired.
To live a comfortable retired lifestyle, where you feel financially confident, Which? research suggests both you and your spouse would need a combined income of £25,000 a year. This would pay for basic expenses, as well as European holidays, hobbies and eating out^.
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For a more luxurious retirement, £40,000 a year (per couple) would allow you to enjoy long haul trips and a new car every five years.
Take control of your retirement. Plan now
It’s often easy to put off things like retirement planning. Especially when it seems like something that’s in the distant future.
Yet preparing the best you can – as soon as you can – could make a real difference to your future.
Figures from the Office for Budget Responsibility show £180bn is estimated to be saved by summer 2021 (since the start of the pandemic). If you’ve been in a position to save more money, it’s worth thinking about how you could put it to good use to support your retirement plans.
Our financial advice partner, Skipton Building Society could help you feel more confident about your retirement plans. They could review your arrangements and provide personalised recommendations – setting you on the right path towards achieving the retirement you deserve.
A pension is a long-term investment and your Capital is at Risk. Your fund value will fluctuate and can go down. You could get back less than you paid in. Your eventual income will depend upon the size of the fund at retirement, future interest rates & tax legislation.
Call Skipton Building Society today for a no-obligation conversation to see if Financial Advice might be right for you on 0345 266 0979 or find out more here
There’s no pressure to act on Skipton’s advice – you’ll have the time you need to think about any recommendations made to you. It’s all part of their No Pressure Promise.
Radio Time’s financial advice service is provided by Skipton Building Society. Skipton is a member of the Building Societies Association, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 153706 to accept deposits, advise on and arrange mortgages and provide Restricted financial advice. Principal office: The Bailey, Skipton, North Yorkshire BD23 1DN. If you take advice from Skipton Building Society, Radio Times will receive a fee for the introduction.