The latest Scottish Widows UK Pensions Report shows that pension savings have fallen to an all-time low, prompting many people to work out how to retire without a pension.
Only 46% of people are now saving enough for their retirement, with the other 54% having put away not enough or nothing at all for their older age.
One in five Brits have saved nothing for their retirement. They will instead rely on State pension provision in later life, which is likely to be equivalent to a flat-rate pension income of £140 once this is introduced.
For this group of people, retiring without any private or occupational pension income is a real and worrying possibility.
Understanding how much you will receive from the State is an important first step when planning for retirement. Obtaining a free State pension forecast will provide a good indication of this figure, although the State pension is likely to change over the course of the next few years.
Many without sufficient pension provision intend on working for longer, thereby deferring their retirement and providing a little more opportunity to save. Despite this, the age at which people want to retire remains an average of between 61 and 62 years old.
With the State pension age set to rise to 68, retiring six years earlier with no substantial retirement provision will prove challenging at best. The availability of work and ability to work in later life can also pose particular challenges.
It’s never too early to start saving for retirement.
Retirement planning can and should take many different forms, with pensions playing only one part of a successful retirement planning strategy. We find that our clients who can draw on multiple sources of income and wealth in retirement tend to be those that are most content financially.
With the population continuing to grow older, and various financial pressures imposed on all generations, finding the disposable income to save for retirement is never easy. It is however important, particularly when the alternative is working out how to retire without a pension.
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