Don’t panic about your retirement planning if you haven’t started yet. It may be that you are near the start of your working life and retirement seems like a distant dream, too far in the future to worry about. You may be in your middle-age, with a mortgage and children and daily financial stresses that capitalise your attention and your money, with no space to focus on future goals. Conversely, you may be approaching retirement age and have started worrying whether your retirement fund and financial planning have been adequate. Whatever stage in your life cycle, thinking about your retirement and making provisions for the future can be a task both off-putting and easy to put off. In fact, a recent survey revealed that nearly one third of adults in the UK (15 million people) have no pension savings at all! If you find yourself amongst this sizeable group, the important thing to remember is that it is never too late to do something about it, and exploring all of your options with your financial advisor can help eliminate some of the stress (real and perceived) from these decisions.
When should I start planning for my retirement?
The simple answer is as soon as you can. Building up a retirement fund that will allow you to realise your retirement dreams can take a career’s worth of work and planning. However, we at Holborn know from first-hand experience that it is never too late to start. If you are in your 40s and 50s (perhaps at the peak of your earning potential) you still have time to order your finances, lay down your retirement plans, and start accumulating for your golden years. In fact, it may be that you have made more of a start with your pension fund than you realise. Here are 4 steps you can take right now to get your retirement planning on the go.
1. Review your finances: Many of us have increasing demands upon our incomes (mortgages, the cost of living, children, cars, insurances etc) and it can seem impossible to find any spare cash to save. Taking the time to review your finances can be well worth the effort, however, and you can gain valuable insight by simply keeping a note of everything you spend for a few months. Small changes like swapping supermarkets or eating out less often can have a big impact on your ability to save.
2. Review your UK State Pension: If you have worked for 10 years or more within the UK you have some entitlement to the basic state pension. However, if you have worked for 35 years or more you are entitled to the full state pension. At present that’s £159.55 per week, so if you’re part of a couple, both entitled to the full state pension, that could total £16,592 per year. You can now check your National Insurance contributions online to see how many qualifying years you have, with the option of backdating payments for any shortfalls for up to 6 years. This can be particularly worthwhile if you have had a career break to have children, or have relocated overseas to work, for example.
3. Review “forgotten” pensions: If you have moved around jobs in your working life, it can be worth checking with previous employers to see if you were contributing to a work-based pension scheme. A surprising number of people are unaware of the value of old pension schemes that have faded into distant memory. But even a modest amount can make a real difference when you are pooling your resources for retirement. Contacting old employers can be well worth the effort.
4. Review your relationship with investing: It is never too late to change your relationship with your own finances. At Holborn we pride ourselves on our relationships with our customers, understanding that any financial plan must be tailored to an individual, not a one-solution-fits-all approach. We recognise that attitudes to risk and investment are personal and require on-going advice and support to ensure that your needs are being met.
Whatever your age, and whatever your dreams about the future, you are never too young or too old to plan for your retirement. Contact your IFA today to see how you can benefit from some sound financial planning.