Do you know what your State Pension will be when you retire?
For Pension Awareness Week (13-17 September), a survey conducted by the Pensions and Lifetime Savings Association (PLSA)1 has found that almost half of non-retirees (46%) don’t know how much they will receive when they retire. The research also found that a majority of the public (78%) don’t know that the full State Pension is currently £9,339 p.a.
Get to know your figures
Many people only review their pensions when they are about to retire, by which time it’s too late – it pays to get advice so you can understand your figures well in advance.
It also makes sense to check for any forgotten pension pots, as losing track of a pension is more common than you think. No wonder, given that people will on average move house eight times in their lives. In fact, research from the Association of British Insurers estimate that there are around 1.6 million lost pension posts in the UK, collectively worth £19.4bn2.
Visualise your retired self
You are likely to still want the same things in life when you retire: a sense of purpose, social interaction and activities that interest and stimulate you. The difficulty comes in trying to forecast your future finances, so that you can have the retirement that you want. This is where Cashflow Modelling can help.
In essence, this provides a rolling balance sheet that contains your monthly income and outgoings, savings, investments, pensions and other assets.
With this information to hand, your Advising Partner can assess your current situation and plan for your future goals and requirements, such as retirement. By adding in assumptions about the possible direction of variables such as inflation and investment returns, predictions can be made about how your situation might change over time and whether you will have enough money to realise your goals.
Instead of being faced with a spreadsheet full of numbers, the information is shown in a series of clear graphs and charts which can help you to visualise your future.
When it comes to planning your retirement, Cashflow Modelling can help with questions such as:
- Will I run out of money in later life if I spend more now?
- Will I have enough to retire at my preferred age?
- Where will my retirement pot come from?
- What would my finances look like if I needed long-term care?
- How can I structure my retirement income in the most tax efficient way possible?
Our commitment to you
Nigel Peaple, Director Policy & Advocacy, PLSA, commented, “It is striking that so many people do not yet know the basic elements of pension saving, such as how much the State Pension is worth, how much they need to save, and the choices they must make about how to draw their pension at retirement. This Pensions Awareness Week, we want savers up and down the UK to take stock of their pension saving and to check that they are saving the right amount to achieve the retirement lifestyle they want.”
This is where we can help. We believe that the real value in working with a financial adviser is about the long-term journey of financial planning. Successful planning involves a regular review of your circumstances and adapting to changes over the long term.
1 PLSA 2021
2 ABI 2020