Maximising your retirement
If you are approaching retirement, chances are you’ve been envisioning what your new lifestyle will look like after you finish work and have your bucket list at the ready. But before you can begin ticking off your list of ambitions, careful Financial Planning will be needed to ensure your dreams can be realised. This should be an exciting new chapter of your life so it’s important that you enter it feeling confident about how your ideal lifestyle will be funded.
Pensions have become increasingly complicated over the last few years with various ways to access your money and greater personal responsibility in making your savings last as long as you do. With more flexible pensions, and the population of the UK living longer than ever before, planning in advance for your retirement is becoming even more important.
Unfortunately, far too many don’t plan ahead. According to new research from Just Group*, only 14% of retirees over the age of 55 took regulated advice or guidance before taking retirement. It was also found that just 4% took Pension Wise guidance, the government’s free, impartial pensions guidance service. The findings, which were based on answers from 1,043 retired and semi-retired over-55s in the UK, showed that just one in 10 saw their own financial adviser, while only 4% saw an adviser arranged by their employer.
Furthermore, three in 10 people said they didn’t do any financial assessments and just retired, but this rose to half (51%) of those who retired when they started to receive the State Pension. Although State Pension income is the biggest source of income for around half of retired households, almost four in ten people fail to check their State Pension forecast before stepping back from work.
These figures highlight the poor planning and low use of professional support among retired and semi-retired people aged 55+ at a key decision point in their lives. This could lead to people having to drastically reduce their standard of living in retirement.
You’re not on your own when it comes to planning and making important financial decisions in relation to retirement. If your circumstances are more complex, it is probably best to talk through the options with a Financial Planner. Extensive research carried out by Royal London** shows that:
• Fostering an ongoing relationship with a Financial Planner leads to better financial outcomes. Those who received ongoing advice had nearly 50% higher average pension wealth than those only advised at the start of their retirement planning.
• Receiving professional financial advice over a five-year period resulted in a total boost to wealth (in pensions and financial assets) of £47,706.
• The proportionate impact of taking advice is greater for those of more modest means compared to the ‘affluent’ group identified in the research. With regards pension wealth, the uplift from taking advice is 11% for the affluent group compared with 24% for the non-affluent.
Retirement Planning is something we are passionate about at BFP. We’ll start by looking at your Lifetime Cashflow requirements, then we’ll review your existing pensions and funds and establish how much income you’ll require to fund the kind of retirement you want. Once that’s done, we can provide technical advice on pension planning and provide bespoke strategies that secure the retirement income you need. We’ll meet with you for regular Planning Meetings to reassess your position and make sure everything is still on track. Not only will it ensure you’re on track to a financially secure future, it’ll also give you more choice and a greater level of control over your eventual income, providing you with peace of mind.
Your retirement should be a stress free and exciting chapter of your life. If you would like to discuss how BFP can help you to obtain financial wellbeing in retirement, please don’t hesitate to contact us to arrange a complimentary first meeting.
Sources: * Just Group, accessed August 2021, https://www.justgroupplc.co.uk/~/media/Files/J/JRMS-IR/news-doc/2021> * Research was conducted by Opinium on behalf of Just Group among 1,043 UK retired and semi-retired adults aged 55+, between 21 and 26 April 2021.
** Royal London, accessed August 2021, < https://www.royallondon.com/media/pressreleases/archive/financial-advice-provides-47000-wealth-uplift/ > ‘What it’s worth, Revisiting the value of financial advice’. An ILC report produced with the support of Royal London
