As pensions specialists for the West Sussex and Surrey areas, we always make the point that you are never too young to start saving for your pension. In fact, the younger you are the better! Aside from giving you longer to put pensions savings aside, you typically have fewer outgoings the younger you are, before costs associated to owning or renting a home, or possibly expanding your family and taking on more commitments start to factor in. You will quite possibly earn less when you are younger, but it’s all relative and if you are fairly clear on regular outgoings then this really is the best time to start getting used to putting money aside for your pension.
HAVE YOU LEFT IT TOO LATE TO START A PENSION?
It’s never too late to start! That being said, there are some guidelines that suggest what a ‘good’ amount of pension money to have saved are, based on your current age. The Money Advice Service pension calculator helps you to determine the approximate pension income you are on target to receive when you retire and whether it is sufficient to fund your desired lifestyle in retirement.
It’s important to look at things in perspective and if you haven’t been saving enough, don’t be overwhelmed by the amount you may now need to put aside. Predictably, pension savings requirements tend to increase as we get older, but debt levels often begin to decrease as we age too – cars and homes get paid off, loan repayments start to dwindle and often, credit cards will be used less.
WHAT IF YOU REALLY DON’T HAVE ENOUGH MONEY SAVED INTO YOUR PENSION?
Many people are surprised to find that they are not projected to have enough to sustain them through retirement. We are all living longer, and healthcare is improving all the time. This means that your pension pot will most likely have to last longer that your parents’ and grandparents did. If you’re unsure what you need, our financial projection software can look at all the likely scenarios and give you an idea.
That being said, if you have significantly less that you should in your pension pot then you are going to have challenges and if you don’t have any savings at all, you could be faced with a serious problem. While it is never too soon to start saving into a pension though, it’s also never too late. Something is always better than nothing and we can help you develop a strategy that is designed to see your pension savings increase and grow.
Successful pension planning balances the things you can anticipate with the things you can’t. We all have different needs and different goals, which is why the one-size-fits-all solution should only be used as a guide and you should always sit down and talk about your lifestyle plans and how much you will really need if you are to achieve them in retirement.
For pensions advice in West Sussex, Surrey or beyond, get in touch to speak to one of our pensions and retirement planning advisors.
This article does not constitute financial advice and should not be construed as such.