According to a survey in 2017 by the Financial Conduct Authority, about 15 million people in the UK have no pension savings at all.
This means that they will have to rely solely on the State Pension when they enter retirement. It’s fairly obvious to see that this is not an ideal situation.
So, what can you do to avoid this fate and plan adequately for your own retirement? Here are 4 great tips to help you on your way.
Start a Pension
The first and most obvious way to plan for your retirement is to start a pension if you don’t already have one.
Firstly, it would be worth chatting to your employer to see if you are currently making any pension contributions.
If you are, discuss how you can potentially top these up. If you’re self employed then you could look into setting up a SIPP or Self Invested Personal Pension.
However you go about it, contributing an adequate amount per month towards your pension will be the first step to planning properly for retirement.
Decide What Standard of Living You Want
Another great step to take is to decide what standard of living you want to have in retirement.
When you’ve done this, try and work out how much you are going to need to put away each month if you are going to achieve your goal.
Many people get a big wake up call when they do this, as it can really bring home the fact that they are not saving anywhere near enough.
Don’t just think about the basics either. Try and be realistic and factor in that you may want to have a decent holiday now and then.
The more honest you are now, the better things will be in the future.
Educate Yourself Financially
You might also want to start educating yourself financially, so that you can get the most out of every pound you put away.
Learning about the different types of investments that are available, the potential risks involved with each and the fees charged by fund managers can pay dividends over the long
term.
Nowadays there are many free guides available online from reputable investment firms and also from the government.
These can be a great help in planning properly for retirement.
Think About the Bigger Investments
Finally, take some time to think seriously about some of the biggest investments you might need to make in life.
Buying a house, for example, might seem unattainable right now but is it?
Or, is it just that you might need to make some lifestyle changes now in order to achieve the goal?
Owning your own home by retirement could drastically increase your standard of living at that time.
It could also give you some home equity to tap into if needs must.
Sacrifice Today for a Better Tomorrow
While planning properly for retirement might seem like a disruption to your current lifestyle, it is a necessary evil that shouldn’t be put off.
Do you really want to be sat at home when you’re 70 worrying about whether or not you can put the heating on? Or, would you rather be on a cruise around the Mediterranean?
While this comparison may seem far-fetched, it could very well become a reality depending on the decisions you make right now.
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