How pensions advice can keep you secure in retirement

It’s a sad fact that many people have not made adequate financial plans to enjoy a good retirement lifestyle. As life expectancy grows, many people in their eighties find themselves in poverty.

The Chester area has a resident population of about 335,700. Of these, there are 70,300 older people over the age of 65. Many of them enjoy a financially comfortable retirement, but some find it difficult to afford any of life’s luxuries and can even struggle to heat their homes in the North West’s challenging winters.

The minimum may not be enough

When you retire, you will be entitled to the state pension. Most people working full-time will also be enrolled in a workplace pension scheme. Self-employed people can also join in a pensions scheme.

If your workplace pension pot is worth £100,000 when you retire, you may think that is a reasonable sum, but if you withdrew 7% a year, you would receive an annual income of £7,000 on top of the state pension. If you retired in 2000 at the age of 60, then by 2014, you would have run out of your workplace pension. If you took out 6% a year, the pension savings would run out in 2020.

As you approach the age of 80, you could find yourself with just the basic state pension to live on, thus stunting your lifestyle.

All of this shows that contributing the minimum required amount to a workplace pension may not be sufficient. On average, a male retiring at the age of 65 will find that his pension savings last 18.5 years, or 20.5 years for females. Life expectancy is rising, with many more people living to 80 and more.

People retiring as members of final salary schemes will continue to receive income until their death, but these workplace pensions schemes are becoming rare.

Pensions advice can show you how to avoid running out of pension money when you approach the age of 80.

Investments

The obvious solution to running out of retirement income is to save more. Many employers allow employees to voluntarily contribute more than the minimum amount to their workplace pension savings.

You could save in your bank savings account, but interest will be low. To achieve better interest rates, take a look at equity income funds, or purchase shares. There are risks involved in investing in the stock market, but if your investments are spread among a number of funds, the risks can be minimised.

There are bonds and other investment types worth considering. Due to the wide range of investment choices, it is advisable to seek pensions advice in order to formulate an investment plan.

Where to turn to for pension advice

You can start your plan for increasing your pension savings by talking to a financial expert at Endeavour Financial Planning, who can show you how pensions advice can make all the difference in how much money you have to live on when your working days are over.

Investments – The value of units can fall as well as rise, and you may not get back all your original investment

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation