A recent study shows that around 30% of middle-aged people (age 40-55) will only be able to have a basic standard of living at retirement. This age group in general has lost out on pension value due to the transition from defined benefit schemes to defined contribution schemes. From a guaranteed monthly pension for life to a pension based on the size of their retirement savings.

It is challenging for many to try and make up this shortfall so late in life, and those with defined contribution schemes, are at risk of not achieving a modest retirement income.

• 44% of these middle agers have gaps in their defined contributions schemes due to unemployment or taking time off to care for family or sick parents

Only 7% are saving enough for a comfortable retirement. *

How do we make up the difference?

To achieve a decent standard of retirement, it is estimated that around 21% of earnings would have to be saved. This allows for a comfortable retirement and enough to be somewhat financially secure and allow for surprise expenses.

Saving isn’t always possible due to the high cost of living and debt we are burdened with on a daily basis, but there are some things we can do to try and close the gap to a decent retirement.

• The easiest is after a salary increase. Funnel the extra income directly into your retirement savings. You are used to not having it so won’t feel it in your pocket
• Any bonuses or inheritance could be a valuable boost to your retirement savings
• Consider renting out rooms or part of your residence. This could be a valuable supplement to your retirement saving contributions and a monthly income booster during retirement
• Cutting down on monthly frills like memberships and subscriptions and tightening the belt on the budget could allow for extra contributions to your retirement savings
• A private pension plan could help supplement your retirement income

*www.dailymail.co.uk

Your financial adviser will help you review your budget to find ways to funnel more money into your retirement savings and look at private pension plans so you can live the retirement lifestyle you always envisioned. [email protected]

Please note, the above is for education purposes only and does not constitute advice. You should always contact your Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.