The value of hindsight in retirement planning

December 2017

The value of hindsight in retirement planning

Alan Ferguson - Origen consultant   
Alan Ferguson 
Origen Consultant                   

Expectations of retirement are changing – the image of reaching retirement, mortgage free with a generous income from employer pensions is increasingly becoming the exception rather than the rule.

The changing landscape for retirement and other daily priorities and routine mean that planning for retirement can often be overlooked. But valuable insight from those who have completed the retirement journey can show the importance of putting retirement planning in our actions at the earliest opportunity. If you have already retired, you may want to share your experiences with your family or friends who have yet to retire.    

The Government’s auto-enrolment scheme, introduced in 2012, has meant that employers must automatically enrol employees into workplace pensions into which both must contribute. However, contribution limits are initially low, so if you want a comfortable retirement, you should try to save more than the minimum. 

The outlook for retirement

Thinking about retirement rarely gets the pulse racing – but recent research from Prudential highlights the value of experience from those approaching retirement.

·         54% of respondents who are 10 years away from retirement thought that they would be worse off than current retirees. Some are even jealous of retirees who have the security of defined benefits pension schemes which pay out a guaranteed income based on salary and service with the employer.

·         63% said that the best advice that they could give to those working would be to save as much as possible for as long as possible.

The retirement challenge

Despite the concerns raised by those approaching retirement, there are reasons for optimism. 40% believe that they would be as financially comfortable as those who have already retired, and 27% of those within 10 years of retirement have been saving into a pension since they started work.  

Taking action now can help you make a real difference to the quality of life in retirement. Otherwise at the point of retirement, you will have to face the painful choices of:

·         Delaying your retirement or working part time

·         Living on lower income than you had expected in retirement

·         Using other sources for retirement income – which may mean you have to sacrifice other planned expenditure.

Tackling the retirement challenge

62% of those aged 45 to 54 don’t know how much they have saved for retirement according to LV= research. The average pension savings of this age group was £71,342, but typically a pension pot of around £100,000 would provide an income of only about £5,000 in retirement. 

Making retirement plans is unlikely to be top of many lists of how to spend our spare time - but taking the time to plan and review can be invaluable.

Step 1: Find out what pension savings you have

You can gather information of your pension benefits from your previous employers, using the Pensions Tracing service if required, https://www.gov.uk/find-pension-contact-details and obtain a State Pension forecast  https://www.tax.service.gov.uk/check-your-state-pension, to start building a picture of what pension savings you have.

Your Origen Consultant can help you to assess what your current pension arrangements may provide and recommend actions to get your plans for retirement on track.

Step 2: Consider your income needs in retirement

Working with you, we can assess your income needs in retirement and consider any financial goals which you may have. You may have a financial goal in the future such as special holiday, family wedding or new car purchase as well as ongoing commitments which could end such as mortgages, loans etc. or new commitments if you move to rented accommodation or require care in old age. Considering and planning these income needs can help to make them more achievable, the sooner you take action.   

Step 3: Address any shortfalls

We can check that existing plans are best placed to deliver and help you maintain National Insurance contributions so that you qualify for the maximum State Pension. We can then assess your financial plans and your affordability and identify actions you should consider to help you make additional pension contributions and bridge any gap in current pension savings and the savings you require to provide the retirement income you require.

Take up the challenge

Our Origen Consultants have wide experience of providing advice to clients with different circumstances and needs. So start your own retirement challenge and contact your Origen consultant to help you take the steps to a financially secure retirement.  


This article is for information only and is not to be taken as Financial Advice.

CA1771 Exp. 12/18

[ Date Posted: 11/12/2017 17:15:15 ]