Research undertaken by Standard Life shows that retirees, on average, had aimed to accumulate £250,000 for their retirement. However, the actual average pension pot was just £131,000, resulting in a shortfall of £119,000. This discrepancy could have substantial implications for retirees’ lifestyles.
Financial planning regrets – lessons from retirees
The research also uncovers several common regrets among retirees regarding their financial planning. Half of the respondents wished they had started thinking about their retirement finances earlier when they had more time to make adjustments. Additionally, 54% wished they had saved more, and 53% regretted not starting to save earlier. Other notable regrets include:
- 51% wished they had more information on retirement planning.
- 42% believed they should have sought financial advice or guidance to plan their retirement.
- 37% felt they should have sought advice before accessing their pension savings.
The challenge of retirement planning
Determining the savings you need for your ideal retirement lifestyle is challenging, particularly the further you are away from retiring. Sticking to a savings plan is even more difficult, as daily expenses and unexpected costs often take precedence over long-term savings. The disparity between hoped-for savings and actual savings is unsurprising, especially amid the recent cost-of-living crisis, but it can lead to a significantly lower standard of living in retirement.
Actions to boost your pension savings
There are a number of actions you can take to potentially enhance your pension savings and work towards a more secure and comfortable retirement.
- Start early and contribute regularly
- The earlier you start saving, the more time your money has to grow. Regular contributions, no matter how small, can significantly boost your pension pot over time.
- Take advantage of employer contributions
- Many UK employers offer to match your pension contributions up to a certain percentage. Make sure to contribute enough to get the full employer match, as this can provide a significant boost to your overall retirement savings.
- Maximise tax relief
- Contributing to a pension plan can provide significant tax relief. Higher-rate taxpayers can particularly benefit from higher tax relief rates. You can also contribute up to £60,000 each year into a pension (known as your Annual Allowance) and bring forward unused allowances from the previous three years. Personal contributions up to your annual earnings also continue to receive Income Tax relief until you’re age 75.
- Already used up your pensions allowance?
- We can advise you on alternative vehicles for long term savings that can be used to complement ongoing pension saving.
- Regularly review your pension savings and retirement goals
- Your Origen financial adviser will help you review your pension plan to ensure it aligns with your retirement goals. We can help you adjust your contributions as needed, especially after life changes like a new job or an increase in salary. We can help you make sure you’re getting the most from your pensions as you work towards retirement and ensure that once you get there, you’ve got the right options when taking benefits to live the lifestyle you want.
- The closer you are to reaching retirement the clearer your retirement goals might become. This can be an important opportunity to take stock and assess whether your planning so far has achieved what you were expecting before it’s too late!
How Origen can help
Whether you are still working or have already retired, it’s important to have regular financial advice. At Origen, we often advise clients who are not fully aware of the value of their pension savings, the options available to take their pension, or how to best use their savings during retirement.
We can guide you through every step of the process, from helping you to track down information on all your existing pensions, understanding your financial objectives and personal circumstances, and providing options that help you towards your retirement goals.
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