Inflation and your retirement income

Several strategies to lessen its impact on retirees

The recent inflationary rises over the past few years could be a source of worry if you’re a retiree relying on your pension for income. It’s natural to question the resilience of your retirement income plan in the face of escalating prices and how it might influence your lifestyle and long-term aspirations.

Planning for an early retirement

Living life to the fullest and accomplishing long-held dreams

Early retirement typically signifies reaching financial autonomy before the statutory pension age, usually in the mid-60s. In the United Kingdom, retirees can begin drawing their State Pension at age 66. However, this retirement benchmark is set to increase to age 67 by 6 April 2028.

Aspiration for early retirement among the young generation

Time is indeed the most powerful asset at the disposal of young savers

The dream of early retirement is alive and well among the younger generation. Still, to realise this dream, they must prepare to bolster their pension savings by an estimated 15%. A recent study has revealed that approximately one-fifth (17%) of youthful savers aged between 22 and 32 aspire to retire before reaching the age of 60. Intriguingly, 70% anticipate retiring before the present State Pension age of 67[1].

Charting your financial future

Tackling retirement anxieties requires understanding your current financial resources

Retirement is often seen as the golden phase of life, a period earmarked for relaxation and pursuing personal interests. However, a recent study has pointed towards an increasing trend of ‘retirement anxiety’, especially among individuals aged over 40[1].

Piecing together the pension puzzle

Research highlights the gender disparity in financial engagement

A recent study has identified an alarming discrepancy in financial confidence between genders. It shows that women are 33% more likely to confess to a lack of understanding about their pension operations[1]. This gap in comprehension could be a potential reason why some women seem less inclined to engage with pivotal financial products that promise better future outcomes.

A delicate balance

Financial commitments and pension planning

The challenge of managing bills and other financial obligations while simultaneously saving for a pension may seem daunting. However, it is certainly achievable with the right planning and timely action. The sooner you start, the more advantageous it could be if you contribute to a defined contribution pension.

Bolstering retirement savings

A secure retirement isn’t just about spending adjustments and significant lifestyle changes

A recent study reveals a promising trend among 45- to 54-year-olds in the UK[1]. Six out of ten individuals in this age group are actively working towards bolstering their retirement savings[2]. These mid-lifers are prioritising their future financial stability, implementing changes in their current spending habits to ensure they can support themselves later in life.

Auto-enrolment

Facilitating and promoting more significant savings

For employees, auto-enrolment is a crucial component to consider in their retirement strategy. Understanding auto-enrolment becomes critical as we increasingly understand the need for adequate retirement preparation. Historically, while some companies offered their employees the chance to contribute to a pension fund for retirement preparation, others
did not.

Time to SIPP into financial freedom?

‘I want to take charge of my retirement savings’

A Self-Invested Personal Pension (SIPP) is more than just a pension. It’s a gateway to financial freedom that can offer you an unparalleled level of control. With a SIPP, you are at the helm of your investment decisions, determining how your money is invested and your pension pot grows. Whether you make regular contributions or occasional lump-sum deposits, even a modest start can significantly impact your retirement nest egg.

Hitting pause on your pension

Decisions to increase short-term income can dramatically affect future wealth

In times of financial stress or uncertainty, it may be tempting to hit pause on your pension contributions. However, before you do so, it’s essential to understand the long-term implications this decision may have on your retirement savings plan.