Re­tire­ment readi­ness varies widely in UK

Western Mail - - BUSINESS WALES / PERSONAL FINANCE -

THE readi­ness of house­holds for re­tire­ment varies sig­nif­i­cantly across the UK, anal­y­sis has found.

Har­g­reaves Lans­down looked at Of­fice for Na­tional Sta­tis­tics and Gov­ern­ment data and found that house­holds in the South-East need to save the most over their work­ing life­time – £411 per month typ­i­cally – to en­sure they reach the same in­come as pen­sion­ers in their re­gion.

At the other end of the spec­trum, house­holds in Wales need to put by around £207 per month to en­sure par­ity with their re­tired neigh­bours, ac­cord­ing to the es­ti­mates.

Har­g­reaves Lans­down looked at the amount cou­ples in each re­gion po­ten­tially need to save each month over a 46-year work­ing life to have the same in­come as pen­sioner house­holds in their re­gion.

The cal­cu­la­tion made var­i­ous as­sump­tions, in­clud­ing that both peo­ple in the cou­ple have the full state pen­sion to fall back on and that their pen­sion sav­ings are turned into in­come at a rate of 4%.It also as­sumed an­nual in­fla­tion and earn­ings growth of 2%, in­vest­ment re­turns of 5% and charges of 0.75%.

Har­g­reaves Lans­down said the largest pen­sion sav­ings are squir­relled away by peo­ple in Scot­land, where av­er­age pen­sion wealth is £140,400. At the other end of the scale, the small­est av­er­age sav­ings are in the East Mid­lands at £87,400.

It found pen­sion­ers in Lon­don are hard­est-up af­ter house­hold spend­ing, with only £6 left over per week. By con­trast, pen­sion­ers in the North-East have £109.

Here are the monthly pen­sion sav­ings needed by a cou­ple to reach av­er­age re­gional pen­sion in­comes, ac­cord­ing to Har­g­reaves Lans­down:

■ Wales £207

■ North­ern Ire­land £217

■ North-East £244

■ West Mid­lands £250

■ York­shire and the Hum­ber £256

■ North-West £261

■ Scot­land £276

■ East Mid­lands £282

■ Lon­don £300

■ South-West £352

■ East of Eng­land £358

■ South-East £411

Here are five tips from Har­g­reaves Lans­down for plan­ning for life af­ter work:

■ Work out what you have got Start by get­ting an up-to-date valu­a­tion from all your pen­sions. Track down all of your pen­sions, par­tic­u­larly from old em­ploy­ers you worked for a long time ago – as ev­ery pound counts. It is also worth get­ting a state pen­sion pro­jec­tion, as this will form the bedrock of your re­tire­ment in­come.

■ Think about when and where you will re­tire Con­sider whether you want to fin­ish work as soon as pos­si­ble, work for as long as pos­si­ble or grad­u­ally re­duce your work­ing hours. You may even fancy a change of ca­reer. Mov­ing to a new area could cut house­hold costs.

■ Cal­cu­late how much you need to live on While your spend­ing may stay around the same as be­fore you re­tired, there may be one-off items to bud­get for like a new car or that once-in-a-life­time hol­i­day.

■ Look at boost­ing the amount you pay into a pen­sion Even small sums can help – pay­ing an ex­tra £100 per month per­son­ally from the age of 50 can boost your pen­sion by over £30,000 by the time you reach 65.

■ Stay on track Check­ing your sav­ings once or twice a year can be enough to give you the con­fi­dence you are on track and make changes if you need to. Stay­ing on track may be eas­ier if you have con­sol­i­dated your pen­sions, but check you are not giv­ing up valu­able guar­an­tees or pay­ing steep exit penal­ties. Your ex­ist­ing pen­sion provider can tell you if you are.

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