Retirement Planning in the UK

Whilst planning for a pension is at the bottom of the list of priorities for most 20 and 30 year olds, those who start to make provision in those earlier years will save less and have a bigger pension pot than those who wait until their 40's and 50's to make some provision.

The UK State Pension is just £84.25 per week for a single person, and £134.75 for a couple.  Compare this to "average" salaries of £447 per week, and there is one very big gap!

Whilst there are a couple of additional sweeteners, such as the free television licence when you're aged 75 or over and the winter fuel heating allowance, if you're hoping to live a life of comfort, it's advisable to have additional provision.

A useful rough guide as to how much you should save is to half your age, so if you're twenty, put in 10%, if you're forty, put in 20%, etc. 

For those people who have the opportunity to have a pension from their employer, it's well worth while.  This is almost always better than making your own provision, but it's as well to check with your pensions adviser.

Often professional financial planning advice is free, so taking advice on this key provision for when you retire could pay dividends later in life.

Whilst many people have been disillusioned by the collapse of a number of key company pensions and are considering alternative funding for their retirement (such as rental income from a second house), there are both short and long term tax implications to take into consideration.

You can save through a Stakeholder pension (great if you're a mum who's at home with the children, but want to make some provision for your retirement), an ISA (where the money is easily accessible for emergencies) or you can take out an AVC (additional voluntary contributions) for your employer's pension (in most cases). 

It's important to take advice on this as well as to get regular updates of your Pension Forecast from the Government's Pension Service.

Useful Info

Debt Settlement & Credit Repair - clearing your debts and credit cards is the highest priority before saving for the future. 

Household Budget Worksheets - creating a budget can really work and save you money

Retire in Comfort for Pennies - where can you retire that will enable you to live in the style to which you'd like to become accustomed?