SWT Wealth Management
Advertising feature: With the Queens Platinum Jubilee celebrations behind us, there is one thing the Queen can teach us about living a much longer life. Unlike the rest of us, the Queen continues to work but in reality most of us would have been retired over 30 years if we are lucky enough to reach the grand old age of 96.
Although living longer is a positive thing, there is the real danger that a huge proportion of the population will be at risk of running out of money in retirement by outliving their savings and or pension pots. Recent research by the Wealth & Assets Survey (April 2022) established that 54% of UK households are just not saving enough towards their retirement. With the added pressure of the cost-of-living crisis and for those on low incomes, many households are likely to continue to struggle with putting money away for future needs1.
It is hard to know how much money you are going to need in retirement but as a rule of thumb you should consider it to be in the region of at least half or two thirds of the salary you were earning before retiring. Remember in retirement, commitments like mortgages are likely to be finished and you won’t be saving for retirement anymore. Expenditure on travel for work and commuting will have stopped and supporting children financially should be less or finished.
According to the latest figures published by The Pensions and Lifetime Savings Association, a single person would need an income of about £11,000 per year to achieve the minimum living standards, £21,000 a year for moderate and £34,000 per year for a comfortable lifestyle. A married couple would need around £17,000, £31,000 or £50,000 to meet the same standards2. They deem a comfortable retirement being one where you can afford to meet your household running costs and bills, buy groceries and be able to eat out, run a car or be able to use public transport, plus have money for leisure activities and holidays. All without having to rely on your savings.
With the full state pension providing £9,627 per annum for tax year 2022/2023, if you have the full 35 years of qualifying national insurance contributions, its easy to see how some people who are not putting by for their future are going to struggle to maintain a comfortable lifestyle in retirement on just the state pension. Your state pension is there to subsidise your other retirement funds and not be the main source of your income. Remember the state pension age is constantly being reviewed and currently if you were born after 5th April 1969 your state retirement age is 67 and 68 if born on or after 6th April 1977 . This is the same for both men and women.
It is so important to review what you have set aside for retirement and seek some advice on whether it is going to be sufficient based on the lifestyle you plan to lead. Too many people go through life without seeking retirement and pension advice and as many seek that advice at a much later date than they should have. The younger you are putting plans in place, the sooner you are likely to retire but also the more likely you are to reach the goals that you want to achieve. Don’t leave things too late, when it is then going to be harder to build funds up as you have less time on your side. Plan in advance as it will then cost you less and you will have plenty of time to review and make any appropriate changes to the plans you have put in place. That way those retirement goals won’t just be dreams and are more likely to be the future that you deserve after a lifetime of working.
The value of an investment with St James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.
The Level and basis of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is dependent on individual circumstance.
1Source: Update to Gov.UK ONS April 2022
2Source: www.plsa.co.uk (The PLSA/Loughborough University Retirement Living Standards) April 2022
SWT Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.
To find out ways we can help visit: www.swtwealth.co.uk or contact us on 029 2252 0168 or 07946183512