Five retirement planning fundamentals
By Kirsten Hastings, 29 Feb 16
With the tempo of pension reforms unlikely to slow, there are sure to be new pitfalls to avoid. But according to St James’s Place there are five retirement planning fundamentals that will remain. Use the arrows on the images below to find out what they are.
If people have not saved enough then, quite simply, the freedom to take benefits in a variety of ways is of little value.
Despite all the advantages of saving into a pension – and the freedoms for taking benefits – the stark truth is most Britons are still not putting enough aside for the retirement they expect.
According to BlackRock’s latest Investor Pulse Survey, people want on average £23,000 per year in retirement income, but believe that a pot of £204,000 will achieve this. In fact, it would require a pot of £407,000.
More than half of people in the UK have never checked the value of their pension savings. Two in five don’t know how much they are paying into their pension pot, and three out of five don’t know how much their employer is contributing.
Furthermore, people tend to underestimate how long they will live; those in good health at age 65 are expected to live well beyond the age of 80, meaning that retirement will last 20 years or more.
Increased flexibility in pension income is welcome. But the most important thing is to build a fund that gives you the retirement you want for the rest of your life.
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