It’s never too early to start saving for your retirement. With people living longer than ever before, we all need to save more. But because there’s always something more urgent to pay or save for, it’s something that many of us rarely think about.
Why save for retirement?
Put simply, a State Pension may not be enough for you to live on in your later years. How much your State Pension is worth could depend on how many years’ National Insurance Contributions you pay while you’re working along with other criteria. You can find more details on gov.uk.
When am I going to retire?
If you keep working until you’re 65, you can expect that you’ll need to live off your pension for at least 20 to 30 years. That means for every two years that you work, you may need to save enough to pay for one year of retirement. You can work for as long as you want to and are physically able. You don’t have to retire when you are 65 and your employer can’t make you. Your retirement age is different to the age that you’re eligible for a State Pension. Is the age you'd like to retire realistic? Work out your State Pension age using this gov.uk calculator.
How much will I need?
You’re less likely to struggle to make ends meet if your income is high enough to cover your bills and other expenses. So, work out now how much you’ll need to live on once you’ve stopped working. Make sure you factor in extras like bigger energy bills, healthcare and even holidays. You might not need to include things like mortgage repayments and travelling to and from work. Once you’ve done that, take a look at all the pensions you currently have. Are you saving enough or should you be putting aside more?
How do I start saving?
There are lots of different ways to save for your retirement. Whether it be an ISA, private or workplace pension, or even investing in property, the earlier you can start saving, the more time it will give your money to grow. The more your savings grow, the more chance you have of achieving your ideal retirement income. Leaving things until later may mean that the amount you’ll need to save is unaffordable.