Pension saving is considered an important endeavour when people are planning towards retirement, and putting enough away is key. However, many people’s plans for retirement aren’t measuring up to the kind of support they actually need. Research from Hargreaves Lansdown unveiled some interesting points about the retirement plans of Britons.
The survey asked a total of 2,000 people their current plans for retirement and the understanding of their pension.
As a result of these figures, Britons are now being encouraged to take action on their pension savings.
Firstly, it will be important to “get to know” one’s pension, to ensure someone has a full understanding of what they are set to receive.
This may end up being a tick box exercise which examines how much is in savings, how much can be taken in retirement, and whether contributions need to be increased.
Next is deciding when a person is ready to retire, and how they will take this action.
Some will want to leave the workforce immediately, while others may wish to drop down to part-time work.
If one has a partner, it is also important to discuss retirement plans together to make sure everyone is on the same page.
Mr Long continued: “It can be difficult to know where you stand when it comes to your pension.
“It’s not something that comes up very often when you’re down the pub with friends or around the dinner table.
“Most people are in the dark as to whether they’re making sensible plans, paying enough in, and making the right decisions about their pension savings.
“There’s no one single right way to prepare for retirement. For one person, their plan may be to start winding down at 55 by going part-time, while someone else may be happy to work full-time until 65.
“But it can help to know how you compare to people of a similar age, and roughly where you should be at each stage.”
Ideally, he stated, using a retirement savings vehicle such as a Lifetime ISA or pension will be key when planning for retirement.
And Britons should be regularly taking stock of workplace arrangements and paying more in if necessary.
Mr Long concluded: “A moderate annual income in retirement is £20,200, according to the Pensions and Lifetime Savings Association.
“Some of this will be provided by the state pension (£9,339 a year if you get the full state pension) but where’s the rest going to come from?”
Some people will be unsure where to begin with their pension saving, namely how much they should be putting away on a regular basis.
However, Hargreaves Lansdown has highlighted a general rule which is worth bearing in mind when it comes to this endeavour.
The organisation highlighted 12 percent of a person’s income as a general amount to put away each year between the ages of 18 to 68.
Circumstances, though, may change, and there are some instances where putting this kind money into a pension may not be achievable.
As a result, Britons have been encouraged to make use of a pension calculator to determine how much they should be aiming for.
Such tools are available through official websites such as Money Helper or Your Pension – a service provided by the Government.
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