Are you saving enough for your retirement?
Tuesday 5 December, 2017
Thomas Oliver’s North London Financial Adviser and Financial Planner, Tracy Dove reviews the benefits of pension planning to achieve your financial goals in retirement.
Tracy Dove, Financial Adviser and Retirement Planner in North London & Essex said:
‘As a Financial Adviser in the UK I am always surprised at how many new clients do not appreciate the value of saving for their retirement. Many people I speak to would rather enjoy their money now while they are well enough to make use of it. Others believe that they do not need to worry about life in retirement as they pay full national insurance and therefore will be entitled to a full state pension.’
At Thomas Oliver we would recommend all our clients undertake financial planning and plan for their retirement. Although they may prefer to spend their money now, it is prudent to consider retirement planning. The sooner you start saving for your retirement the better chance you have of achieving your retirement goals. We would also recommend saving into your own pension plan as a way to supplement a state pension.
Tracy Dove, Financial Adviser and Financial Planner in North London & Essex continued:
‘The government has recently raised the pension age so workers will have to wait longer before accessing their state pension. Also most people who work today and pay full national insurance are unlikely to get their full state pension. When the pension system was established it did not consider the issue of people living longer, medical science advances. All these factors are impacting on the current pension system.’
Thomas Oliver recommends a retirement planning review to make a difference long-term. We can put financial plans in place to utilize the tax breaks that are currently available to individuals. This ensures that your retirement goals can be achieved without being dependent on the state pension.
Anyone working now is encouraged to sign up to their company’s auto enrolment plan and save for their retirement so the onus is to plan for retirement themselves as opposed to be reliant on the state pension.
A recent Guardian article by Patrick Collinson finds millennials are in a better position regarding retirement. According to Collinson young adults will have retirement incomes similar to today’s pensioners, according to analysis which rejects widespread pessimism about the financial prospects for millennials.
Analysis by the Resolution Foundation found that men in their forties will suffer a fall in their retirement incomes compared with today’s pensioners, but the generation behind them will see their incomes recover.
The analysis defies the popular view that today’s pensioners are a “golden generation” who benefited from final-salary pensions. It concludes that while pensioner incomes rose sharply this century to match or even surpass those of working people, these levels can be broadly maintained in the future.
The upbeat assessment is in sharp contrast to other reports which paint Britain’s pensions as among the worst in the developed world.
Resolution said “auto enrolment,” the government scheme in which workers are automatically defaulted into paying into a private pension scheme, will be the chief driver behind a recovery in pension income.
David Finch, senior economic analyst at the Resolution Foundation, said: ‘Rising pensioner incomes has been one of the biggest living standards success stories this century. And yet retirement is second only to housing in terms of causes for concern for young people’s prospects.’
Tracy Dove, Financial Adviser and Financial Planner in North London continued:
‘Resolution has made some large assumptions in its research. It has assumed that individuals will stay in their auto enrolment scheme and it does not take into account what happens when people get into financial difficulty and cannot pay into their scheme. The article by Patrick Collinson focuses on auto enrolment being a success, however in my opinion it is too early to see the actual results and workers should not assume that their auto enrolment pension savings will always generate enough income in retirement. We would recommend that anyone saving into an auto enrolment pension gets financial planning advice because you may need to supplement this income with other personal saving options to achieve your goals in retirement. We offer a free initial financial planning consultation. If you would like to discuss this further please call me on 01707 872000.’
