Pensions are one of the most crucial aspects of securing your financial future. They ensure that you are able to enjoy the new period of your life, without any new stress.

However, a recent study found that 18 million people in the UK weren’t confident in their ability to save enough for retirement.

Planning retirement is often put off ‘until tomorrow’ – it can be difficult to get started with something so complex that also sometimes feels so far away.

Here’s our guide to why one of the most important things to do is understand your pension and ensure you’re contributing as early as possible.

Meeting your goals

The state pension age is rising, meaning government-provided income will come later down the line for many.

If you have specific goals, like moving or retiring early, your finances should give you the freedom to achieve them without worry.

Careful planning of where to spend, save and invest will pave the path for a happy future self. Start by checking if your investments will fund your goals with our pension shortfall calendar.

Unexpected costs

When you’ve worked hard all your life, don’t let unexpected expenses like home repairs, extra care or helping family prevent you from doing the things you love.

Life expectancy is increasing, but not many savers are thinking ahead to ‘late retirement’, the period from our mid-70s upwards, where expenses can rise beyond our pension, due to inflation or new expenses.

Small investments of your disposable income now can make the difference in reducing stress for you and your family later.

Never too early

The earlier you plan for your pension, not only do you have more time to save and invest, but you’ll make better use of the benefits like tax relief.  

It’s common to put off paying into a pension when you think you’re not earning enough to make it worthwhile, but planning small, consistent payments can make a huge difference over time.  

Of course, it’s never too late to start either. A financial adviser can help you understand and explore your options to make the most of your assets and plan for the future.

The results

One of our clients had a wealth of £500K by the time he reached his 70s.

He had been a window manufacturing manager for many years, earning in the range of £25K to £30K.

Starting early with pension and investments were crucial in getting him ready for a comfortable retirement – ISAs alone created £300K, giving him years of financial security and peace of mind. 

You don’t need to be a top earner to create a secure financial future for your retirement. 

For personalised advice to help you get the most of your wealth, no matter the size, get in touch or call 0121 285 8528.

 

Disclaimer: A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation. Whateley Wealth Management is not responsible for any external site content.

All sources included in the above text were accurate as last accessed on: 09 May 2022

Picture source:  https://pixabay.com/photos/seniors-eventide-miniature-figures-4379905/