When thinking about our finances, may of us focus on the short-term rather than looking further ahead. But what about when it comes to retirement? If you don't start planning ahead, you could find that you aren't able to afford the retirement you're hoping for, and this is a concern that's growing among people of all age groups.
28% lack confidence in retirement incomes
According to an international survey by GfK, almost three in 10 (28%) respondents lack confidence that they'll be able to afford the life they want in retirement, including 11% who have no confidence in this matter at all, which means that many could face a far bleaker retirement than they're hoping for.
The survey also found considerable differences in terms of age, with the older age groups – and those closest to retirement – having the highest percentage of those who have little or no confidence in their future situation. This was the case for 35% of respondents in the 50-59 age group, as well as among 40-49 year-olds, while 29% of those aged 30-39 lacked confidence in being able to afford a comfortable retirement.
It's particularly worrying that the older age groups are the least confident about the state of their future finances, as they're the ones who have the least amount of time to rectify the situation. However, even those aged 20-29 still expressed concern about their future, with almost a quarter (23%) admitting that they lacked confidence in being able to afford the retirement they want, despite the fact that they have decades to prepare.
Start getting organised
The results just show how important it is to have suitable plans in place, even from an early age, because it can be hard to make up a shortfall in later life. Ideally, you should be enrolled in a workplace pension – if you're not yet, you'll have the chance to in the next few years as auto-enrolment continues to roll out – but depending on your age and commitments, you may like to have separate savings vehicles, too.
A cash ISA (for example) could be the perfect place to save for the future as any interest you earn will be tax-free, and over the years you could build up a hefty pot. Just remember to not have too much kept in any one place, as with the Financial Services Compensation Scheme limit set to drop to £75,000 in December, you should aim to have no more than that saved with any one institution.
Make sure to be proactive with your retirement savings and keep a close eye on your pension statements and how your savings and investments are performing, as that way you'll have a better idea of whether or not you're on track for the retirement you want. If you think you may be facing a shortfall, get professional advice to try and rectify the situation, and hopefully you'll be more confident in being able to afford the life you want after work.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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