Retirement Savings Longevity

March, 2020

Are you facing a pensions challenge?

We all want to ensure we have sufficient funds when we retire so we can spend our time the way that we want to. But how realistic are your current retirement plans?

Our average life expectancy will soon exceed 90 years for the first time ever, according to an international study [1] that suggests people will be living far longer in 2030, with the gap between men and women starting to close. This then raises the very important question: who will live longer, you or your pension?

These improvements in life expectancy reflect the advances in medicine and public health, as well as rising standards of living, better education, improved nutrition and changes in lifestyle. This will mean that as time goes by, you will need to reconsider your financial plans to keep everything on track.

HAVING ENOUGH TO SEE YOU THROUGH YOUR LATER YEARS
There is no commonly accepted definition of when old age begins. For some, the cut-off for when old age starts is 65 years, but this is somewhat arbitrary and is often simply associated with the age one can begin to receive a pension and other benefits. But how will living longer affect your retirement plans? Will you have enough to see you through your later years?

This is particularly concerning in this day and age, because increased longevity means higher retirement savings will be necessary to avoid running out of
money. Much will be dependent on how much monthly income you draw from your pension pot and if you take any lump sum payments.

MAINTAINING YOUR STANDARD OF LIVING IN RETIREMENT
Retirement could last for 30 years or more depending on when you retire and how long you live. Your income in retirement is likely to come from several sources, including your State Pension, any other pensions you’ve built up while working, and any savings and investments you have.

Prices tend to rise over time, so if you want to maintain your standard of living, you’ll need your retirement income to keep pace with inflation. The State Pension increases by at least the rate of inflation each year, and if you receive a retirement income from a past employer, this often rises by the rate of inflation or a set amount each year.

ENOUGH MONEY TO LIVE ON FOR THE WHOLE OF YOUR RETIREMENT
If you’ll need to rely on your savings and investments to boost your income, you’ll probably also need to increase the amount you take from these over the years if you want your income to go as far as it used to. But if you take more income than your savings and investments earn each year, you will gradually reduce your capital.

The longer this goes on, the less savings you’ll have and the greater the risk of these running out. So before you give up work, you need to make sure these will provide you with enough money to live on for the whole of your retirement.

PLAN YOUR FINANCIAL FUTURE
The way you accumulate your retirement money and how you use it during your retirement will have a big impact on how long it will last – and
also on the amount of tax you pay. Contact us today to discuss your retirement options and to understand which income solutions could help you. We look forward to hearing from you.

Source data:
[1] www.thelancet.com/journals/lancet/article/PIIS0140-6736%2816%2932381-9/fulltext

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. TAX TREATMENT IS BASED ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. ALTHOUGH ENDEAVOURS HAVE BEEN MADE TO PROVIDE ACCURATE AND TIMELY INFORMATION, WE CANNOT GUARANTEE THAT SUCH INFORMATION IS ACCURATE AS OF THE DATE IT IS RECEIVED OR THAT IT WILL CONTINUE TO BE ACCURATE IN THE FUTURE. NO INDIVIDUAL OR COMPANY SHOULD ACT UPON SUCH INFORMATION WITHOUT RECEIVING APPROPRIATE PROFESSIONAL ADVICE AFTER A THOROUGH REVIEW OF THEIR PARTICULAR SITUATION. WE CANNOT ACCEPT RESPONSIBILITY FOR ANY LOSS AS A RESULT OF ACTS OR OMISSIONS.

Affinity Integrated Wealth Management is a trading style of Buryfield Grange Limited. ‘Buryfield Grange Limited’ is authorised and regulated by The Financial Conduct Authority. Not all services provided by Buryfield Grange are regulated by the Financial Conduct Authority. ‘Buryfield Grange Limited’ is registered in England and Wales at ‘Inspire House, 20 Tonbridge Road, Maidstone, Kent ME16 8RT Company registration numbers 4568338.

What our clients say

"Many thanks for your part in all this and I will be mentioning, and I trust that this is acceptable to you, to my accountants, Applied Accountancy, that you have given me excellent advice and been most helpful and prompt about it all."

Mr Leigh-Pemberton CBE DL, Kent

What our clients say

"Ian has always been helpful and hugely knowledgeable. I am a woman on my own and I feel that Ian is someone I can trust with my finances as I find much of this area very difficult to understand. He is professional and competent, as are all his staff."

Geraldine, Surrey – Client for 7 Years

What our clients say

"Finances, investments, pensions etc are all complex issues and generally complicated & difficult to understand. We chose Ian Painter of Affinity to manage our savings because he is very professional in his approach and his knowledge covers every aspect of the market to offer the best advice to secure our investments. We are very happy with the service we are receiving from Mr Painter and his team and have no reservations in recommending him to others."

Martyn, Berkshire – Client for 5 Years