A FIFTH of UK people are in danger of sleep walking into an uncomfortable future unless they start planning for retirement now, claims one of Scotland’s leading independent financial advisers.
Financial experts MacDonald & Co have called on people to start saving earlier and investing smarter for retirement to avoid an end of life which is plagued by poverty.
Says a spokesperson: “The call comes, after a study revealed that one in five of people reaching pensionable aged this year expect to live on less than £10,000 a year in a country which is facing the looming spectre of stagflation.
“Inflation in the UK is set to hit 4 per cent yet economic growth remains slow, prompting calls for increased interest rates which could put further strain on people’s personal finances.”
Says Robert MacDonald, of leading Glasgow-based financial advisers, MacDonald & Co: “The results of a recent survey into how people expect to pay for their retirement makes uncomfortable reading and highlights the desperate need for people to start planning for their future as early as possible.
“The state simply cannot afford to support people in old age as it once did because the UK’s GDP is way down on what it was in the 1950s and people are living much longer lives.
“If you want a comfortable retired life then you need to talk to a financial adviser and preferably a Certified Financial Planner about how much you should be putting away as early as possible.”
The spokesperson continued: “A survey of 10,143 adults aged over 45 including 1,005 planning to retire this year found the average person retiring this year expects to receive an annual income of £16,559 including any private pensions and state pension.
“The Class of 2011 are slightly better off than those who retired in 2010 when the average estimated income for those planning to retire was £16,509.
“However, this comes after two consecutive falls in the average estimated retirement income. In 2009, the average was £17,779 and the year before it was £18,663.
“Results from the whole group suggest that in light of the current economic climate just two in every five people (39 per cent) believe they have saved enough for a comfortable retirement.”
Continues Mr MadDonald: “This is alarming because if people haven’t started saving by the time they hit 50 then they face a much more punishing saving curve.
“For example, if a person is aged 50 now and will not be able to retire until 65 or 66 they need to take a careful look at the standard of living they want to have and start saving to supplement the state pension.
“At this stage they may have to save around £100 a month but if they put it off until they are 55 then it might be £250 a month.”
The study which was commissioned by the Prudential found nearly half (45 per cent) are convinced they have not saved enough while another 16 per cent do not know whether their savings will be sufficient.
Ends
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