Are You Facing A Mid-Life Savings Crisis?
Have you started to save for your retirement? If the answer is ‘not yet’, sadly you are not alone. With the cost of living rising, it seems that many people are putting off saving into a pension, or not saving at all.
Financial pressure in the form of rising rents and escalating house prices, coupled with a period of low wage growth, has taken its toll on would-be savers.
Britons are facing a mid-life savings crisis, according to research from a major insurance group1. A third of British adults aged 35-39, equivalent to 1.3 million people nationwide, report having no pension cash saved, despite fast approaching their peak earning years.
The picture is equally bleak for Millennials; almost two in five adults aged 25 to 34, equating to 3.2 million people across the UK, aren’t saving into a pension either.
Putting off making proper provision for retirement could mean financial hardship in later life. Even delaying saving for a couple of years can have a major impact on the level of income you can expect at retirement. The earlier you can start saving into a pension, the more time your money has to grow. Saving into a workplace scheme, such as under auto-enrolment, has the added benefit of employer contributions, which means extra free cash goes into your pension fund. Any money you contribute yourself, within HMRC annual and lifetime allowances, is also boosted by tax relief.
It’s important to remember that the state pension was only ever intended to be a safety net, and is unlikely on its own to be sufficient to provide a comfortable retirement. Plus, the state pension age continues to rise and will reach 67 by 2028. So, put starkly, not saving in your younger years could mean that you will have to work for longer in order to be able to afford to retire.
1 Zurich, 2016
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