Why save now?

YOU DON’T WANT TO MISS OUT

Perhaps if you’re young, retirement seems like a lifetime away to you. Maybe if you have a family you feel like you cannot afford to save, or if you’re over 50 you think to start saving now would be too little too late.  In fact, it’s never too early to start saving for your future, and if you’re approaching retirement, it’s a good idea to start saving as much as you can comfortably afford.

WHY SAVING NOW IS KEY TO ENJOYING THE RETIREMENT YOU WANT

• People are living longer.  By 2031, it’s predicted that people will be living an additional 4.3 years in retirement (UK Pensions 2010, Datamonitor – 26 August 2010), which means your fund at retirement may need to be bigger. You may wish to increase your contributions to help you fund the retirement you want. Calculate how much you need to save with our Retirement Planner .
  
  If you’d like to find out more about how much you should be saving, you may wish to speak to a financial adviser.
• Rising costs.  There’s no way of knowing how much things will cost in the future. The value of your money today can change over the years due to inflation. As a result, money today could be worth less in the future.
  
  To try to counter the effects of inflation, it’s useful to increase your contributions each year.  This should help strengthen the value of your pension.
• The sooner the better.  The earlier you start adding to your pension, the more time your fund has the potential to grow.

A pension is a long-term savings plan and although you may not see the benefits immediately in your day-to-day life, you’ll be grateful that you’ve an income to rely on at retirement.

DON’T DELAY

You could be missing out! The longer you wait to save into a pension, the more you will have to contribute to reach your desired income at retirement. Let’s take a few scenarios. Ellen, George and Ashley all want to have a minimum income of £10,000 per year (in today’s terms), from age 65, but they are all starting to save at different ages.

By starting now, you could end up with much more than if you delay. Paying into your pension gives you a significant tax advantage and your employer may also contribute to your pension pot. It’s a good idea to save as much as you can comfortably afford so you can enjoy your retirement – without financial worries.

Try our Retirement Planner  tool and see how much you need to save to achieve the retirement income you want.

Increasing your contributions is a way to compensate for starting late. If you’d like to increase your contributions, please speak to your employer or seek financial advice.

Use our action plan to help you review your savings and find out if you’re on track to fund the retirement you want.