September 30th 2019

Are you retirement ready?

Recent research has shown that most British people would like a £40,000 annual income when they retire. To get near this, you are likely going to need a pension pot in excess of £500,000. If that is your goal, are you on track?

The reality is, by starting to save towards your retirement as early as possible, you can make your money travel much further.

It isn’t too late to start saving in your thirties and forties, but it is usually a bigger monthly financial commitment because your investments have less time to grow before your retirement.

With this in mind, what are some of the key areas you need to think about if you are hoping for a comfortable retirement one day?

The state pension

The new full state pension in 2019-20 is likely to give you about £8,767.20 a year when you retire, assuming you qualify for the full amount.

This certainly will not get you the whole way towards most people’s desired retirement income. However, that does not mean you should turn your nose up at it.

Make sure you are on track to qualify for the full amount, as early as possible. Remember, to qualify for the full state pension you now need at least 35 years’ worth of National Insurance contributions.

Your workplace pension

As of April 2019, if you are employed then you are required to contribute at lat 5% of your annual salary to your workplace pension scheme. Your employer is also required to contribute at least 3%, leading to a combined total of 8%.

We strongly encourage you to think carefully if you are considering opting out of your workplace pension, as you are effectively walking away from free pension money from your employer.

In fact, if you are able to do so, then we recommend that you consider whether you are able to increase your monthly pension contributions – perhaps to 7%, 10% or even more.

If you are due an imminent pay rise, then try not to simply waste it on unnecessary spending. Putting some of it aside for the future is usually a good idea.

Other options

There are many aspects of your finances which can have a big impact on your financial including student loans, mortgages, overdrafts and debts – to name just a handful.

Having a plan for these different aspects of your financial life is also likely to influence the kind of retirement you will enjoy one day. However, it isn’t always easy to see how these different pieces of the puzzle fit together – and each individual piece can be complex enough in itself!

That’s where we can help here at Hine Financial Services. As experienced financial advisers, we can offer you impartial, qualified insight and advice regarding your financial goals and situation.

For further advice, call us on 0161 438 0000.