Don't Look Back in Anger when you reach retirement
It’s been almost 30 years since Oasis released their chartbusting classic, “Don’t Look Back in Anger”. It began by asking what you might find if you slipped inside the eye of your mind – Noel and Liam thought there might be a better place to play tucked away in there.
They probably didn’t think about flagging up the need for a financially comfortable later life.
But it certainly looks like they're thinking about that now, as the reformed brothers bring Oasis back out of the rock-and-roll retirement home. And they’re not alone. Our latest research shows that having to go back to work after you’ve retired has become quite a common millennial worry.
Oasis are back.
But really, would you want to come out of retirement and go back to work?
And unlike the Gallagher brothers, we can't all just come out of retirement, put on a few shows and earn a few extra quid.
62% of people my age worry they have to go back to work after they retire and less than half of us have even started saving.
So if, like me, when you retire, if you don't want to look back in anger having not saved enough for retirement, here's what you can do.
First up, understand your workplace pension.
You should check what you're paying in and that your contributions are maxed by your employer.
Even a small boost to your pension pot could add thousands by the time you retire, and we could all do with that.
Number 2, spending.
Track your spending and work out where your money goes every month.
Three, you should pay off any debt, or any credit cards or loans if you have them.
Starting off by paying the most expensive debt first can help you save in the long term.
Saving for your future, even little by little, can get you there a lot quicker.
So to find out more about pensions and how to say for your future, search with a Little bit richer podcasts wherever you get them.
You don't just have to roll with it.
Many millennials are letting savings opportunities Slide Away
That’s one reason why three in five (62%) of UK millennials worry about the prospect of having to return to work once they retire. Over three quarters of them (78%) admit they’d feel frustrated if their future selves didn’t have enough savings in place.
But almost half (49%) of them don't have a retirement plan in place. Just over one in 10 (12%) of people aged 28 to 44 don't have any money saved for when they retire. Of those who are saving, only about a third (36%) even know how much their monthly pension contributions are.
Our Masterplan for your later life savings
With the return of Oasis prompting discussion about the prospect of coming out of retirement, Katharine Photiou, Managing Director of L&G’s Workplace Saving Business, shares her tips to help millennials avoid looking back in anger when the time comes:
- Don't underestimate the power of early starts - the earlier you start saving into your workplace pension, the harder your money can work for you and the more help you’ll get from the government and your employer. While retirement might seem like a long way off, start saving early and you’ll reap the rewards!
- Pay off your most expensive non-mortgage debt first – before you begin your saving journey, make sure you have a plan for paying off any credit cards, personal loans or similar debt. Start with the most expensive, so you save as much as possible on interest.
- Make the most of your savings – cash ISAs pay interest on your savings, while Stocks & Shares ISAs let you invest your money with the aim of achieving better longth term growth.
- Understand your workplace pension and boost contributions – most workers in the UK contribute 8% to their pension automatically through their salary (split between the employee and employer). While this is a good start, consider if you can afford to increase your contributions - even 1% could make a serious difference. Many employers will match increased contributions up to a certain level – which is essentially free cash, and something that can add a significant of money to your pot over time. And don’t forget the tax relief!
Next steps to Definitely Maybe take
We’d suggest going through our list of tips and seeing which ones work for you. Try to put as many as possible into practice as soon as you can – don’t be like Noel and Liam, and put things off for a decade or two.
And we can help you sort out your savings in other ways too:
Our Pension Calculator
Check you’re saving enough to build up the
right-sized pension pot.
Our Stocks and Shares ISA
Invest in the stock market the simple, flexible,
tax-efficient way.
Our Personal Pension
Set up your own pension and bring any other old ones into it too.