It may sound like a simple question but have you ever given the answer much serious thought?

There may be a number of reasons why people don’t appear to be taking planning for their retirement seriously, but what exactly are the consequences of doing nothing and just hoping that everything will be OK? A growing number of people appear to be oblivious to the actual facts and figures when it comes to planning for their retirement. This has perhaps stemmed from the growing culture of a nation living on credit, rather than on savings and it goes a long way to explain how the UK economy got into its current mess in the first place. On top of this, the doom and gloom surrounding the very word “pensions” in recent years has left many people disillusioned and ‘living for today rather than planning for tomorrow’. However, a quick reality check suggests an increasingly concerning trend with some alarming statistics.

Those who are living for today only perhaps think that the government will look after them in retirement. However, with government borrowing levels now at a scale never seen before and with cuts being made in every area of the economy, can we guarantee that a basic State pension will even exist when we finally get to retirement? Talking of which, does anybody actually know when that ‘retirement’ will be? We have already seen steps taken by the current government to increase the normal retirement age to 68 for people in the UK, but with people living longer surely it’s only a matter of time before this is increased again? I digress, but, under current legislation, assuming that you do have sufficient working years to qualify for a full basic state pension, you can look forward to the hardly grand sum of £102.15 per week. That is £5,311.80 per year to be precise, but with rising living costs how exactly can people expect to maintain their standards of living on this modest income?

According to the latest research, nearly half the working population are not saving enough for retirement and a fifth are failing to save anything at all. The results are significant because pension saving is especially low among younger people. Government figures show that 78% of 18 to 24 year-olds, and 43% of those aged 25 to 34 are not saving anything towards their retirement.

In the current economic climate it’s easy for people to find reasons as to why they can’t afford to save but are we just using this as a convenient excuse?

So, back to my original question; who is going to pay for your retirement? It is you of course. But the good news is that it is never too early or too late to start funding for your retirement. With careful planning and some simple budget planning, saving for your retirement doesn’t have to cost the earth. One of the most important parts of this process is to ensure that you have an appropriate pension to meet your individual circumstances and to make sure that your hard earned money is managed properly along the way.

If you would like to learn more and start taking your retirement planning seriously please contact me at paul.dawes@msfs.co.uk

Tags: retirement, pension

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