Live for the day (but plan for tomorrow)
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Live for the day (but plan for tomorrow)
A recent survey from the Pensions and Lifetime Savings Association has found that 77% of savers don’t know how much money they’ll need in retirement, demonstrating a need for clearer guidance to help savers to engage with their pensions*.
Help is at hand
Recently, the PLSA published its Retirement Living Standards, which outline three levels of annual expenditure that retirees would need to attain three different standards of living in later life.
The Standards demonstrate what a ‘minimum’, ‘moderate’ and ‘comfortable’ lifestyle might look like (e.g. what a person or couple might be able to afford in terms of holidays, social activities and other luxuries), and the estimated yearly income required for each. For single people, around £10k would be needed for a ‘minimum’ lifestyle, £20k for a ‘moderate’ retirement and £30k to be ‘comfortable’. For couples, the figures increase to around £15k, £30k and £45k, respectively.
A new industry standard?
The PLSA’s vision is that 90% of active savers will belong to a pension scheme that includes the Standards in communications with its members by 2025.
Look to the future
If you are unsure about how much you should be saving to live comfortably in retirement, or need assistance to plan for the future, please get in touch.
*PLSA, 2019
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our 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.
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