Five easy ways to make early retirement dreams a reality
Could a few lifestyle tweaks help realise hopes of ending your work life early? VICKY SHAW seeks some expert tips to boost your pension
UNLESS you have a very well-paid job, or are expecting a lottery win, the idea of retiring early may seem like an impossible dream. But by starting early and committing to regular saving, perhaps you can nudge the dream a bit closer to reality.
Some people even go to extreme lengths to try to retire early – which may involve dramatically cutting back their spending while trying to maximise their savings.
However, for many, this may be an unsustainable way to save, but you could still boost your chances of retiring early by making more moderate lifestyle changes.
Here, Laura Laidlaw, head of customer savings at Standard Life, looks at how this can be achieved...
Know what you want
Like anything, it is important to have a goal to work towards. Being realistic with what you want from your retirement, and what this will cost you, will help determine how much you need and how long you need to work for to get it.
Considering how much money you will need to live on will be dependent on a variety of factors, from the kind of lifestyle you want, where you want to live and whether you want to continue some form of work.
Remember that early retirement doesn’t necessarily mean giving up work altogether. Many retirees kick-start part-time careers in something they love, or pursue a hobby or side hustle that could make extra money. Factoring in earnings from this should help your planning too.
Start early and cut back
Once you have a clearer idea of your goals and what you’ll need to fund them, you’ll need to work out how to get there.
If you start early enough, there are many ways to make small changes that will build up to be substantial savings in the long-term.
It’s understandable that extreme budgeting isn’t for everyone, but being stricter about what you spend your money on could help make an earlier retirement a reality.
Simple savings can be made in your everyday spending. You could change where you shop, switch utility providers, use vouchers and cashback websites, swap expenses like shop-bought coffees or maybe cancel monthly subscriptions you don’t use.
Once you have worked out where you can make savings, be savvy with where you put that extra money. For example, you could consider topping up your pension, if you have one. But remember you won’t be able to access pension savings until age 55. Another option for longterm investment, which is more accessible, is a stock and shares Isa.
While investing can carry risks, over the long-term the returns may potentially be greater.
Be smart with the cash you save
You don’t need to be close to retirement to think about saving into a pension. As soon as you enter the world of work, putting savings into a pension is a brilliant way to be tax efficient.
Some employers offer matched monthly contributions to your workplace pension, so if you are lucky enough to be offered this you should take advantage with extra payments to boost your retirement fund.
It’s also worth considering putting any work bonuses in future years into your pension. If your employer gives the option of making a pension contribution using bonus sacrifice, the boost to your pension could be worth much more than if you took the bonus as cash.
‘Side hustles’ can also boost your pension pot
Climbing the career ladder is one way to boost your income – but starting a side line enterprise is another. Look into other options and don’t be put off by ventures that will only add small increments to your monthly income - every little helps across a longer period of time.
Get creative about ways to earn a bit more money. This could be anything from selling things you no longer need on auction websites, or turning a hobby into a small business to work around your main job.
You might even consider renting out a spare room in the future if you have one. Whatever it might be, any additional income could help to get you closer to early retirement.
Seek professional advice
Trying to work out how and when to retire can be difficult, so using a financial adviser could help make early retirement a possibility.
A financial adviser can discuss your plans, including when you can afford to retire, what you can afford to spend each month or year, as well as help you choose the right investment options to get the most out of your money.
Remember that early retirement doesn’t necessarily mean giving up work. Many retirees kick-start part-time careers in something they love...
OVER the last year, some things have become essential in our lives to such a degree, that we only notice how important they are when they go wrong. Among those key services are broadband and wi-fi.
Broadband is one of the most complained-about services at Resolver, yet we’ve not seen a massive increase in the last year – which suggests that while things aren’t great, they’re not a disaster. But still, more than 17,000 people complained about a broadband issue – and more about mobile phones and wi-fi.
By far the biggest issue is broadband speed not delivering, not working at all or regularly packing in. This is the source of much frustration for you all, given it means waiting in for an engineer for most of the day, not to mention some infuriating callcentre experiences.
Here are a few tips to help you keep on top of broadband problems.
Check your speed:
There are loads of free apps that you can download that will allow you to check the actual speed of your broadband connection. Our friends at Moneysavingexpert have a great guide on their website covering your options.
Once you’ve run the test, take a screenshot each time you check on your phone so you’ve got some evidence to back up your complaint.
Download shows, guides and school lessons to your computer/phone/tablet. Don’t wait for the system to go down, use the download function on TV streaming sites to save the programs you love while it’s working.
Ask for options: Speak to your broadband provider about what they’d suggest when it comes to tackling speed or supply problems. Bear in mind Covid means there may be fewer engineers available. Do tell them if you’re classed as vulnerable or shielding. Download the app: Most broadband providers have a handy app that allows you to do speed checks or tells you if there’s work going on in your local area.
Give your signal a boost:
There are lots of things you can do to improve your broadband signal, from making sure your router is near the phone line, using cables not wi-fi, upgrading your router and reducing the number of electrical items that might be giving off signals nearby.
Even a humble old fish tank or overgrown plant can cause problems if the router is hidden nearby.
Getting techy: You can get booster boxes and cables from most electronic stores to help you with your signal problem. Your broadband provider will also provide these but ask any engineer who pops round and they’ll tell you to buy them from a different store or online as they’ll be much cheaper.
Most of these boosters are designed to improve your Wifi signal around the house, but some also help improve your broadband speed. Check before you buy to make sure the goods do what you need them to.
Take it higher: Still not happy? Resolver can help you make a complaint, but it pays to set out your argument in simple terms. If you want out of the contract, provide proof of the poor service and the efforts you’ve made to sort it out. This is where those screenshots you’ve taken come in helpful.
Be nice. This pandemic is putting a huge strain on everyone. So it will take longer to sort out problems. Stay calm and say thanks.
Need help with a broadband complaint? Get started at resolver.co.uk and get the latest consumer rights advice on COVID-19 too.
THE start of the year is tough financially at the best of times but for many of us, lockdown has made getting by even harder. Here are our tips for saving £100 (or more) this week by making a few small changes.
1 FIND FREE MONEY YOU DIDN’T KNOW YOU HAD
CHECK to see if you have a forgotten savings account or if you have inherited one from someone, at mylostaccount.org.uk
2 FOOD FOR THOUGHT
SPEND this week using up the food you have in the freezer and store cupboards.
Only buy a few perishable foods to go with what you already have.
You should be able to save at least £30 in the week doing this.
3 UNSUBSCRIBE!
ACCORDING to Natwest, the typical adult wastes £39 a month on subscriptions they never use.
This includes services such as Amazon Prime, streaming services such as Netflix, magazines, gym memberships and even mobile phone and travel insurance that automatically renews each year.
Go through what you have and see what you can cancel.
4 GET WHAT YOU CAN FOR FREE
IF YOU’RE desperate for a sofa or need a replacement fridge, don’t bother buying one. Trawl through free offer sites, such as Freecycle, Gumtree, Free Stuff and Preloved.
People give away wonderful stuff every day and it’s quite possible to get nearly new items just for the price of picking them up. You can potentially save £1,000 if you get a sofa for free.
5 CUT FOOD COSTS
APPS such as Olio, tell you where people and businesses near you are giving food away for free.
Too Good to Go sends out notifications of cafes and restaurants offering food on the cheap at the end of the day.
Also approvedfood.co.uk is a marvellous site for cheaper food that might be past its ‘best before’ date.
Save £15 in the week doing this.
6 FLICK THE SWITCH
UNPLUG electrical appliances at night instead of leaving them on standby. That alone can save you up to £50 a year.
7 FIX WATER DRIPS ASAP
LEAVING a dripping tap for a year could cost you an extra £100 on your water bill if you are on a water meter.
8 PLAY THE INSULATION GAME
MAKE sure your house is insulated against the cold properly. Not only does it cut energy bills during the winter months but it helps keep the heat out during summer as well. Homeowners on a low income could qualify for boiler grants and insulation grants to help improve the energy efficiency of their home, too.
To see if you might qualify for help, go to boilergrants.org.uk and simpleenergyadvice.org.uk
9 GO VEGETARIAN FOR THE WEEK
MEAT and dairy products tend to be the most expensive items in the weekly food shop so cut yours by being vegetarian or even vegan for a few days.
Visit bbcgoodfood.com for some excellent veggie recipes if you need inspiration on what to cook. This should save you around £15 in a week.
10 CLAIM ALL WORK EXPENSES AGAINST TAX
YOU can claim for costs associated with working from home, washing uniform or travel whether you’re employed or your own boss.
This can bring down your tax bill substantially and if you haven’t done it before, you could be owed a serious refund too. Tax refunds can be backdated up to four years and on average people can claim back between £2,500 and £3,000 according to tax refund company Tommy’s Tax.
11 SWITCH TO SAVE
SET aside a couple of hours this week to find the best deals on all your boring bills like energy, broadband, insurance and mobile phone.
Comparison sites such as Compare The Market, Money Supermarket and Confused can help you get cheaper versions.
If you haven’t switched for a couple of years you should be able to save about £1,000 over the year, particularly if you switch all your insurance policies.
12 SHOP AROUND
IF YOU’RE looking to buy something, it’s increasingly easy to search around for the best price.
Use comparison sites such as Onbuy, Idealo and Pricerunner to find the lowest price.
13 DO A BUDGET FOR THE WEEK
THE more we can budget and plan ahead the more money we save.
Use a free budgeting app such as Hyperjar which helps you apportion money for different types of spending and gives you 4.8% interest while it’s sitting in ‘jars’.
14 SELL UNWANTED GIFTS
ENOUGH time has lapsed since Christmas to make it acceptable to start selling the stuff you didn’t want.
Try Facebook groups, ebay, Gumtree and nextdoor.com to convert unwanted gifts into cash.
15 ASK FOR YOUR ENERGY CREDIT TO BE REPAID
DO YOU pay your energy bill by direct debit every month? If you pay the same amount each time it’s possible that you are nicely in credit now.
Check to see if you are and, if so, ask for some of your overpayment to be sent to your bank account.
According to uswitch.com, almost 13 million households across the UK are owed money by their energy supplier, with an average reclaim amount of £136.
16 MAKE YOUR OWN CLEANING PRODUCTS
SAVE yourself money and improve the environment by using homemade cleaning products instead of the chemical-based manufactured ones.
White vinegar, lemons, newspaper, bicarbonate of soda and sugar soap are pretty much all you need to clean the house safely and efficiently, as I showed in an article on that subject on moneymagpie.com
17 GET WHAT YOU’RE ENTITLED TO
SEE if there are any benefits or tax credits you’re entitled to that you haven’t applied for at turn2us.org.uk and use its calculator.
18 YOU COULD CLAIM A GRANT
WHILE you’re on the Turn2us charity’s site, see if you qualify for a cash payout from one of the many grant-making bodies it has access to.
There are hundreds and at least one is likely to apply to you. There is money for people who work or have worked in the drinks industry, in the provisions industry and the caravanning industry, for vegetarians or vegans under 25 and for Scottish people living within 35 miles of Charing Cross, London, for at least two years. That’s just for starters!
19 SPEAK TO LOCAL AUTHORITY
IF YOU did not get a furlough payment and don’t qualify for Universal Credit, speak to your local authority about getting a one-off discretionary payment.
Not all councils have the money to cover these but it’s worth a try.
20 USE YOUR POINTS.
MANY of us have gathered up points on loyalty cards such as Tesco Clubcard, Boots Advantage and Nectar but we haven’t used them. See what you’ve accumulated and make this the week you actually spend them instead of paying with money.
You should be able to save around £12 this way.
21 USE A CASHBACK SITE WHERE YOU CAN
SITES such as Quidco, Topcashback and Widilo give you cash back for all kinds of purchases from clothes to insurance, and from bank accounts to homeware.
If you need to buy something anyway, first check the best price on comparison sites and then see if you can get even more off by buying through a cashback site.
■ Jasmine Birtles is a TV and radio money expert and founder of the self-help money site moneymagpie.com