According to a survey by the Prudential, Women are more than twice as likely as men to have no private pension provision.
The same survey demonstrated that 20% of women will be completely reliant on the state pension when they retire.
Alarm bells should be ringing.
When will I get my State Pension?
The recent Budget told us that we should expect the State Pension age to rise due to people living longer.
Joseph Lu, Longevity Expert from Legal & General said: “The retirement age for men has been 65 since it was set in 1948, when the life expectancy at age 65 was about 12 years. But if the pension stage age were to be set today, on the same life expectancy basis as in 1948, then it would be 77.”
So, too many of us are relying on a benefit when we can’t be sure:
a) How much it will pay out
b) When it will pay out
Your life in retirement could be nearly as long as your working life! So here are some simple tips to take into account:
Start a Pension Plan
- By using a ‘Pension Plan’ you know that you cannot access it until you are at least 55, which ensures that your fund will remain intact
- You will receive tax relief from the government – which will boost your contributions
Pay a regular monthly pension contribution
- The drip-feed method is the easiest and most effective. Promising yourself to pay a lump sum into your pension fund is a promise that so often never happens
- You also benefit from ‘pound cost averaging’
Never too soon to start a pension
- The effect of ‘compound interest’ means that starting early has a drastic effect on the result
- Get the savings habit early on in life, and you will avoid ‘pension tension’ later in life
Review your pension
- Like your garden, pension plans need nurturing. The better you look after them, the better they will grow
- A pension does not have to be for life. You can change pension providers as often as you wish
- The eventual size of your pension fund is down to the following ingredients: How much you put into it, how long you put it in for, how much the running costs are, and how well the funds perform
- If possible, you should seek professional advice to monitor the performance of your scheme
Henrietta Oxlade is an Independent Financial Planner with Radcliffe & Newlands and MyFamilyClub’s in-house finance sage! She has been advising individual clients since March 1988, which is why many of her clients consider her part of the family. If you want to contact Henrietta, email us on [email protected] and we’ll put you in touch.