Retirement needs more – how’s your plan?
A couple of week ago The Pension and Lifetime Savings Association refreshed their figures on the price of retirement – and there’s been a dramatic old hike versus last year.
As it does each year, the organisation estimated the income needed to retire at three different levels: minimum, moderate and comfortable. In 23-24, the cost of a moderate retirement rose 38% for a single person and 31% for a couple versus season 22-23.
The price of a minimum retirement living standard jumped from £12,800 to £14,400 per year for a single person, and from £19,900 to £22,400 for a couple. Costs for a comfortable retirement also increased but not as starkly as in the other categories.
The hike is chiefly down to the cost-of-living and Britons’ changing priorities following the pandemic, but the whys don’t change the reality. It’s time to get planning.
Minimum means what it says
“The best time to plant a tree was 20 years ago. The second best time is now.”
~Chinese Proverb
If financial planners had a penny for every time we beat the drum for forward planning, we’d probably all be able to retire next week.
But the fact remains that costs are climbing and aren’t about to come down. Burying heads in the sand or putting it off ’til tomorrow are expensive luxuries now.
Ideally, you want to have clarity as to what your ideal retirement will cost even if you’re looking at 20, 30 or even 40 years in the future. A good starting point is to read the definitions of minimum, moderate and comfortable and see which makes most sense to you. Let’s just say minimum does what it says on the tin.
Actions, tips & pointers
A few tips courtesy of the financial planners here at Money Means. As ever, the best first step is anything – so long as it’s action in the right direction. Here goes:
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- Look at the research and start to think about the sort of lifestyle you want in retirement. Get a handle on the amount you’ll need to save.
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- If you’re employed, check that you’re making the most of your workplace pension and not missing out on all the free money that’s possible through employer-matched contributions.
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- If you’re self employed, check you even have a pension. As it stands, just 16% of self employed people are contributing to a pension so, with no-one else doing it for you, isn’t it time to get moving?
We know that pensions can seem scary, but Money Means are here to help support you and make it much less so. We suggest you block out some time aside and get stuck into the relevant actions above and we promise this: your future self will thank you for it.