MoneyMagpie

Oct 12

Still saving for that pension? More and more are having to…

Sometimes stating the blooming obvious is OK because it is a helpful reminder.

In this case it’s the age-old story of a big percentage of the British who don’t save enough into a pension plan and hope that housing and the state pension will see them through to their end.

Aylesbury-based The Share Centre provides a competitive share dealing  and fund buying service. It has carried out research and discovered that the 65+ may not have enough saved for a comfortable retirement.

Tell us about it!

Save early and save often. Only 53 per cent of investors questioned thought they had enough money saved for pensionerdom.

It’s not surprising to learn that virtually the same percentage –  54 per cent – of investors say they want to carry on working in their 60s – for a better pension, a better life.

Research respondents think that a retiree needs a mere £230,000 in savings/pension pot to provide for a comfortable retirement. But they may be in for a shock when they approach stopping work and find they have a less than comfortable level of income in retirement.

In fact Share Centre believes that to retire ‘comfortably’ at 65 on an income of £20,000 a year (with the state pension on top), pensioners will need to have accumulated a pension pot of £400,000.

 

According to the Office of National Statistics

If the main occupant of a home is between 65 and 75 years, the average spend per year is about £23,000. When the main occupant is over 75 the average annual spend drops to £14,000.

Interest rates have been very low for years so it takes a lot of saving to generate a sum like £20,000. Investing directly in shares is one way to build up savings, provided the investor can stomach the risk. Savers should think carefully about saving into funds, they are a good way of saving each month, though there are duff funds.

 

Pension Reminders

Remember that the state pension doesn’t start paying until later in the 60s now and there could be a gap when someone stops work, receives a company pension, but has to wait a year or three for the state pension, extra pension pots could be a boon.

Thinking about the next front line of pensioners, the huge sum of £400,000 to be saved, plus allowing for inflation over 30 plus years, is daunting. Like most people in their 20s and early 30s, they don’t consider, yet, about saving for a pension beyond their company pension, as they feel they have plenty of calls on their salary.

Richard Stone, chief executive of The Share Centre commented:

“We have seen a 16 per cent increase [year on year to Sept 2015] in those aged 55+ holding ISA accounts, demonstrating that investors are exploring different savings options and taking an active approach.

“The value of these accounts has increased 27 per cent which supports the trend ……we have seen since April 6th 2015, when the changes were bought in.

“We feel that research such as this will encourage individuals to start investing, in cash ISAs or shares earlier, to support themselves in later life.”

Hints

There is a great amount of pigeon holing of the 50+ silver haired at work and socially.

I think it is unwise to let hair go silver too soon, particularly if you are in a job. Trillions of men and women know this and colour out the grey to appear contemporary.

It’s alright if you are a CEO, a senior executive, or a politician like Teresa May, but the older you are in middle management you have to defend yourself against colleagues thinking maybe you’re not so cutting edge.

Colleagues say things like “Oh she forgets things now she’s 60.”  Would they have said this if the person concerned was 45 or 50?

It’s easy to be perceived as ‘dispensable’ in people’s minds. This is serious for someone who wants/needs and is capable of, working up to the state retirement age.

Drop ’em dead with good hair colour – and a good cut.

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