Whilst it may sound obvious, the earlier you begin saving for retirement, the easier it will be.
In a recent survey by Liverpool Victoria, it was found that more than 60% of 45 to 54-year-olds didn’t know how much they had saved for retirement. If people spent more time planning for retirement, they would be in a better position to understand whether they were saving enough to meet their future needs.
In the above survey, those asked expected that they would require an average of £1,360 per month to fund their retirement lifestyle, or an annual amount of £16,344. In the current market, this would require someone to have a pension pot of £311,000 if they aimed to retire at 55, or £158,000 if they were looking to retire at 65 (assuming they qualify for the state pension).
However, of those surveyed, between the ages of 45 – 54, their pension pots averaged just £71,342. With almost 40% having less than £50,000, and 13% not having saved anything at all. Our Accountants in Bolton can help you begin the saving process early.
Presuming retirement at 55, the average 45 year-old from those surveyed would need to save approximately £24,000 in pension contributions each year over the next decade to fund their retirement lifestyle – a significant financial constraint.
The findings of this report echo the market problems, with individuals not starting to save until it is almost too late and therefore putting substantial financial pressure on themselves leading up to retirement. When it comes to pension planning, it really is the earlier the better, and in fact, the earlier the easier.
Saving for retirement as a self – employed individual can be hard to manage, especially if you’re a start-up business trying to break even.
For more advice on saving for your retirement, click here to contact us and our accountants in Bolton will be on hand to help.
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4 August 2020
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