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Mid-Life Savings Crisis? It’s good to talk about your options

Put simply, retirement planning is about how you look at your future, but more than a million Britons are facing
 a ‘mid-life savings crisis’ as they near 40 with no retirement savings, according to research from Zurich. A third (33%) of British adults aged 35 to 39 – equivalent to an estimated 1.31 million people
– say they have no money saved into a pension, despite approaching the mid-point of their working lives.

NOT SAVING INTO A PENSION

Screen Shot 2017-02-27 at 14.55.28Among ‘millennials’ (those born between 1980 and 1999), the picture is equally bleak with almost two in five (37%) adults aged 25 to 34 – equating to an estimated 3.2[2] million people – not saving into a pension.

The findings highlight how financial pressures could be forcing some Britons to start saving later, while others are struggling to save at all. Rising rents and house prices, combined with years of low wage growth, have made it harder than ever for people to save.

INADEQUATE INCOME IN RETIREMENT

With the cost of living rising, some
people appear to be putting off saving into a pension, or not saving at all. This is leaving a third of Britons in their late 30s facing a mid-life savings crisis. By delaying saving into a pension, a substantial number of Britons could end up with an inadequate income in retirement.

Younger generations who delay saving may have to retire later. Britons reaching the age of 40 with no pension savings could be forced to work much longer to achieve a secure retirement. Even those nearing their 30s without a pension should not assume they can make up lost ground at a later age, no matter how far off retirement may seem.

WIPING OFF TENS OF THOUSANDS OF POUNDS

Delaying saving for a few years can wipe tens of thousands of pounds off the future value of your pot. The earlier you start investing into a pension, the more your savings will benefit from the compounded benefit of growth on growth.

It is important for savers to maximise their employer contributions and take advantage of pension tax relief. The good news is that your employer and the Government can help to boost your savings.

TIPS TO BOOST YOUR PENSION: Screen Shot 2017-02-27 at 14.55.37

  • Take advantage of higher rate tax relief
  • Maximise employer contributions and if possible salary sacrifice for making pension contributions
  • Use carry forward allowances if you are funding over the annual allowance
  • Avoid losing your personal allowance if your income is over £100,000 by making additional pension contributions
  • Taking risk can work to your benefit in the long term
  • Plan ahead

Looking for a complete retirement planning solution?

With many years of experience we have developed our approach to retirement planning to ensure our clients have clear and achievable goals for retirement and an effective and clearly defined financial plan to achieve these goals over the longer term. As a client’s position and views change over time we continue to work with clients to ensure they remain on track.

To discover how we can help you build a long-term strategy for your retirement plans, please contact us – we look forward to hearing from you.

Who are Vizion Wealth?

vw-portrait-blue-dark-grey-light-grey-ifa-and-wealth-final_edited-2Our approach to financial planning is simple, our clients are our number one priority and we ensure all our advice, strategies and services are tailored to the specific individual to best meet their longer term financial goals and aspirations. We understand that everyone is unique. We understand that wealth means different things to different people and each client will require a different strategy to build wealth, use and enjoy it during their lifetimes and to protect it for family and loved ones in the future.

All of us at Vizion Wealth are committed to our client’s financial success and would like to have an opportunity to review your individual wealth goals. To find out more, get in touch with us – we very much look forward to hearing from you.

DISCLAIMER:

This blog and its attachments or links should not be relied upon as advice, except to the extent that advice is set out in an attached bespoke Suitability Letter. Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change. The value of investments and income from them may go down. You may not get back the original amount invested.Past performance is not a reliable indicator of future performance.

Posted by Andrew Flowers

Andrew is the managing partner of Vizion Wealth and has been involved in the offshore and onshore financial services industry for over 18 years. Andrew was the driving force behind Vizion Wealth after years of experience in a number of advisory roles within high profile wealth management, private banking and independent financial advisory firms in the UK.

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