Retirement Planning

Are You Saving Enough for Retirement?

KLOFinancial |

The Office for National Statistics (ONS) has recently released some interesting new data on average life expectancy in the UK. The data is consolidated in a simple calculator which, when given the user’s age and gender, generates a graph detailing life expectancy and the probability of reaching certain age milestones.

For example, if you are a male currently aged 40, ONS use their data to predict your life expectancy at 86, with a 1 in 10 chance of reaching 100.

The data gets even more interesting when you input different ages, for example the average 3-year-old male has a 1 in 4 chance of reaching 99, according to ONS’s statistics. 

Of course, depending on your health and financial situation, you could live longer than expected. This means that with all the statistics in perspective, it’s crucial that you consider how long your money will need to last you throughout retirement. To get an accurate picture of how much this might be, depending on your circumstances, seeking help from an independent pension advisor is a great place to start.

Balance caution and risk within your investments

Many people saving for retirement may feel that it’s sensible to avoid riskier investments once they’ve finished working. However, exercising excessive caution could prove riskier than the investments themselves, potentially resulting in a pension pot that won’t last you the duration of your retirement.

An independent pension advisor can guide you on the best options for your pension, whether that’s through providing you with advice on spreading investment risk across various assets or to audit your current plan and support you in ensuring that it will allow for a comfortable retirement. Here, it’s vital that you ask how much you need to save for your pension in order to live the retirement you deserve.

Changes to state pension age

While the average life expectancy is predicted to rise, so are calls to increase the state pension age. This could mean that new pensioners may have to wait until age 75 to get the state pension. It’s uncertain whether these changes to the state pension will be considered, but it’s important to note that by the end of 2019, the state pension age will rise to 66. There are also clear plans currently in place for the state pension age to rise to 68 between 2037 and 2039.

This means that people will be waiting longer to retire, giving slightly more of an opportunity to save for retirement. However, this does not affect those who choose to retire early or those looking to surpass the state pension with their own savings.

Now that life expectancy is longer and state pension age is changing, many people are looking for a different way to make sure they have a safety net in place for their future. Whether it’s a new home, money for children and grandchildren, travelling or simply achieving lifelong goals, taking advice from an independent financial planner can really help you to get the best possible value from your pension savings, to ensure they are sustainable and to facilitate the life you want to live in retirement.

If you are looking for an independent pension advisor, Birmingham and Warwickshire based financial services professionals at KLO are here to help point you in the right direction. Talk to our team of local pension advisors today to find out how we can help you.