Do you have any financial regrets? Unfortunately, the answer probably depends on your age. Being able to properly manage your finances is one of the cornerstones of having a comfortable future, but it can be all too easy to let financial concerns slip down the list, only to regret things later on.
Perhaps unsurprisingly, a lack of savings is the biggest regret for many people, with research from Partnership finding that 61% of those aged 40-70 years old cite this as their biggest financial mistake. Within that, 36% regret not saving enough generally while 25% regret not saving into a pension – a figure that rises to 29% among those aged 51-60, a time when many will be making their retirement plans.
It's also interesting to note that among 40-50 year-olds, almost half (46%) regret not saving enough generally, highlighting the importance of starting early. By this point many will start to think seriously about their financial futures, only to realise that they may have left things too late.
The research went on to reveal other sources of financial regret, with getting married and subsequently divorcing seen as the third biggest financial error, cited by 13% of respondents. This was followed by putting money into poorly performing investments (12%), delaying buying a house (8%), buying a property that wasn't good value (6%) and not taking advantage of a workplace pension (5%).
However, these other financial regrets pale into comparison when compared with a lack of savings, pension-related or otherwise, with far more people citing this as their biggest error.
"While everyone makes mistakes in life, it appears that the two most common financial regrets relate to people taking no action at all rather than making an error because they took a huge gamble," said Andrew Megson, managing director of Retirement at Partnership.
"The new pension freedoms mean that people are going to be facing an increasing number of choices. This research suggests that not only do people need to work hard to put aside money while they are working, but that they also need to carefully consider how they intend to use this money when they eventually retire."
Given that a lack of savings is the biggest regret for so many people, the best way to avoid a similar fate is to start saving! You don't need to commit to locking away big sums, either, as even putting away little and often can help – and when you add in a few years (or even decades if you're thinking long term) of compound interest, you'll benefit even more.
Start by using your ISA allowance, either by opting for a fixed rate ISA or an easy access version if you think you may need access to your cash in the foreseeable future, or even a stocks & shares ISA for those who have a slightly higher risk appetite. Alternatively, if you really need a kick-start, consider a regular savings account that requires you to save a minimum amount each month in order to keep your rate.
Then, it's all about your pension. Auto-enrolment means everyone will be automatically signed up to their employer's pension scheme by 2018, but you don't have to wait until then. Paying into a workplace pension not only means you're saving for your future, but you can also benefit from employer contributions and tax relief, so you're building up your retirement pot even more!
So, don't regret not saving enough – if you start early, get into the habit and save into a pension, you can be confident that you're on the right track.
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