Experience is a great teacher, just need enthusiasm and energy to do it all again, at least I had a rattle at it and some things have not worked out as planned but it has been one hell of a journey so far.
I have always believed in financial planning and goal setting and personal development and have read many books, attended seminars and workshops, done courses and have the library built up for reference. Every year I write a business plan and also set personal goals.
My advice is to pay yourself first, protect your income and family and build a nest egg for the future and an emergency pot. Depending on your attitude to risk will determine where you invest but you must sacrifice today for the future.
It seems every company has carried out a survey on the pension gap and long term care and the results are frightening. The UK has largest pension gap in Europe and with confidence in pensions at an all time low people are not saving for retirement so will struggle in their old age. Lack of education is a factor and the constant negative drip about the industry puts people off as well as the mantra i don’t have any spare money at the moment but this never changes and so people never get round to doing anything as it is not a big enough priority as it it so far in the future.
As people live longer , we could be retired as long as we worked so we need to plan well in advance and the reality is most of us will have to keep working well into our 60’s and maybe 70;s to be able to afford to live. The state can not pick up the tab , we have to take responsibility and those that start early will be the winners. With SIPP’S now available you can invest in anything except buy to lets as you would as an individual , so the pension is just a wrapper around the investments with tax benefits. You can do it yourself and pick own funds or shares or whatever if you have time, knowledge and inclination or leave it to others to manage it for you. As long as charges are reasonable the size of your pot depends upon your investment choices , how much you put in and for how long, all of which you control so if you have a small pension it is your responsibility to monitor it and change and stop blaming the insurance company, the adviser, it is your pension and your responsibility.
Many people do not realise the trouble they are creating for themselves and a casual approach or a bury the head in the sand approach only kids themselves and they will be left without dignity and independence in retirement.
“How much will I need when I don’t want to work for money anymore and I want my money to work for me?”
Of course many of us live beyond our means so we need to alter our spending as we struggle with debt, job losses, so we need to save more for emergencies, retirement and with no access to your pension until age 55 at least it will still be there whereas if you could get at it, it would be gone every time an emergency arose. The situation will get worse we will have to think about university fees , long term care, leave an inheritance to children, help children with housing costs as well. It is more a case of necessity that drives people to work beyond their retirement age rather than a desire to stay healthy. Message is simple either save or work longer.
How many couples actually sit down and discuss their finances at all, never mind regularly and ask the hard questions. What if one of us dies or takes ill? How will we survive in retirement?
National Insurance is in fact no better than a Bernie Madoff style Ponzi scheme using new money to come in to fund current expenditure, not the pensions to be paid in the future. When it was introduced in 1926 only 34% of men and 40% of women were expected to reach 65 whereas life expectancy is 89 with many living to 100.
Company and Government employee final salary schemes are doomed in their current structure because the sums don’t add up.
Don’t be a cynic and listen to media’s horror stories, talk to a professional financial adviser and get the hard facts, stop making excuses, make sacrifices and start saving. The longer you leave it the harder it gets but IT IS NEVER TOO LATE.
From 2012 employers will have to fund an employee’s pension , plus the employee must contribute so be prepared.
Many believe downsizing is their retirement plan but think of all it entails and be realistic, as well it is only the difference it the 2 property prices freed up to invest or spend. The best idea is a combination of property, pension, ISA’S so all your eggs aren’t in one basket.
Women will suffer most as they have the least provision so please don’t be complacent
CARE FUNDING CRISIS
If we don’t prepare we will most likely lose our homes, there are trusts you can use.
Do you want your family to bear the costs, and when we get too frail our families are not fit to look after us. We all know people in homes or friends with parents in homes because the elderly need special care 24 hours a day. This is a demographic time bomb hence another reason to build up a decent pension so if you need care you can pay for it. Again we are ignorant of the facts and what local authorities will do so we make wrong assumptions and carry on regardless under some mistaken premise the STATE will provide, get real the State is broke and the well has run dry. Get aware of the issues ahead and take serious responsibility for your old age.
