With the cost of living crisis worsening in the UK, many workers are concerned about the future as well as the present as the pressure of rising interest rates and the prospect of a recession makes it increasingly difficult to put money aside for retirement.
However, when compared with the population of mainland Europe, it appears that those in the UK are further behind in their preparation for retirement, as new data reveals that only 24% are contributing what they can each month to their retirements funds, whilst a larger proportion of those in France, Italy, Spain and Germany commit to saving what they can on a monthly basis.
This is apparent in the number of Brits having to rethink their retirement plan, with this figure now reaching 18%, a scenario which is concerning 21% of women compared with 15% of men. This may in part be due to the fact that only 9% of women hold a private pension compared to 19% of men. This instability concerning the future of UK workers makes for bleak prospects, with many anticipating having to work past the age of retirement in order to make ends meet.
On average, those belonging to Generation X living in the UK will need to save over £330,000 in order to retire comfortably, a number that seems astronomically high and unattainable to many, so how can the average worker possibly hope to save that much over their working lifetime? We’ve put together some tips on saving for retirement to help you.
- Create a budget and follow it
The best way to plan a budget in order to save is to know how much you can spend weekly. - Pay off your mortgage
Your home contributes significantly to your fixed expenses. By paying off your mortgage you can finally live there ‘rent-free’ which eliminates a large monthly spend. - Talk to your spouse or significant other about savings
Be open with your partner about your finances and about how you should be saving and what you expect you will spend in retirement. It’s always helpful to chat openly about finances and avoids any awkward discussions later down the line. - Prioritise your pension
If you concentrate on saving for your pension rather than saving short term this will help you long term.
If you would like to arrange a review of your finances and retirement plan, you can book a complimentary consultation with one of our experienced advisers by clicking the link below.
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This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
The defined benefit scheme – whereby the employer promises the employee a specified payment upon retirement, the amount of which is calculated based on several factors including the years the contributor has been in the scheme, their age, and their salary at retirement – is no longer viable in today’s world.
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