Do you fall into this group?
How do the following statements relate to you?
- Only 19% of people believe they are saving enough for their retirement
- 47% of Brits are not confident that they’ve saved enough to live comfortably when they retire.
- 14% have never made any pension contributions and a further 31% are not contributing to a pension plan of any sort.
- 66% of women and 54% of men say they worry about money either always or most of the time.
- 77% believe they would be happier if they had more money.
These figures are from a YouGov survey of 2,000 people across the UK commissioned professional body to which I am a member, the Institute of Financial Planning (@IFP_UK).
The figures are stark because they are from a wide section of the public and not the low income brackets as is common with these types of survey. They also suggest a level of either apathy or distrust (or both) as to the options for doing anything about it despite a clear indication that a lack of financial planning being a concern.
It is also sad to see that over three quarters of the respondents felt that more money would make them happier. Do we have our collective priorities wrong here? If we get more money does that not just leave us to aspire to be at the next social level up rather than valuing what we have now and using the resources we have as best we can? I have written before about the futility of always wanting more and believe that actually, in my experience, people don’t want to live a different lifestyle in retirement. Rather, they simply want to enjoy what they currently have (possibly with a bit more travelling) and know that they will never run of out money.
The problem is that doing nothing will not pay the retirement bills, rather it will increase the problem as inflation makes today’s goods and services more expensive in the future.
So, how would you have answered the above if the questions were put to you? Have you done enough to ensure your financial security in retirement? If not, I would take the following steps:
- Review what you have in place already (if anything).
- Understand what income you will need to have in retirement to live your desired lifestyle (some assumptions for inflation will need to be made).
- Project what retirement income you are likely to have based on your current retirement savings.
- Calculate how much you need to save each month to meet any shortfall between what you have now and what you need.
- Implement an investment strategy that is aligned to this goal, your timeframe and your risk profile.
- Review how you are doing each year and make changes as necessary.
Most importantly don’t be an ostrich, get your head out of the sand.
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