Retirement Money News

As climate change starts to have a greater impact on our environment, many homeowners are finding that homes are more at risk of flooding than they were 10 or 20 years ago. Being at risk of flooding can have an impact on property prices and increase insurance costs, but for older homeowners looking to release equity from their home, it can also impact getting an equity release deal.

According to the Met Office, the UK is getting wetter and the highest rainfall totals over a five-day period were 4% higher between 2008 and 2017, compared to 1961 to 1990. In addition to this, the amount of rain from extremely wet days increased by 17% when comparing the same periods. The increase in rainfall and, subsequently, increase in the possibility of flooding, means that not only are homeowners living close to rivers, streams and lakes likely to be at risk of flooding, but there is also the risk of flooding from saturated ground.

The auto-enrolment workplace pension scheme is credited with encouraging the vast majority of workers to save towards their retirement. Data released by the Department for Work and Pensions in June found that 88% of eligible employees saved into a workplace pension in 2019, up from 87% the previous year.

Indeed, auto-enrolment, which was phased in from 2012, offers eligible employees an attractive way to save towards their retirement as employers have to contribute towards the pension savings along with the employee. But for employees who are not eligible for auto-enrolment or those who are self-employed, together with those who have either opted out of auto-enrolment or who want to have additional retirement savings, alternative ways to save towards retirement are available.

Although pension funds are starting to recover, new data shows that between July and September the recovery fell significantly compared to the previous three months, putting into doubt how quickly pension funds will recover and when older workers will be able to retire.

Data due to be published in the Moneyfacts UK Personal Pension Trends Treasury Report found that between July and September (Q3 2020), average pension funds returned just 1.7%, which is significantly lower than the increase of 13.3% between April and June (Q2 2020). As a result of the lower growth, average pension funds are still 2.6% lower than at the start of the year.

Commenting on this data, Richard Eagling, head of pensions at Moneyfacts, said: “The performance of pension funds weakened noticeably during Q3 2020 meaning that pension returns remain in negative territory for 2020. Once again, these figures highlight the challenges that individuals face in being able to fund a comfortable retirement.”

Today marks the start of the Chartered Institute for Securities and Investment’s (CISI’s) Financial Planning Week. The week, organised by the CISI and for the first time ever supported by its trade body rival The Personal Finance Society (PFS), aims to help improve consumers’ confidence and understanding of finances.
This includes helping more consumers to plan their finances and to make sure their life goals are supported with a financial plan to achieve these. A good financial plan can include a review of your pension arrangements, making sure your family is protected if your income reduces, a review of your savings and investments and the cost of your borrowing.

The CISI is offering all consumers a free one-hour personal financial planning session worth up to £500 during Financial Planning Week. The PFS is offering support through its pro-bono programmes, which includes 100 financial advisers offering free guidance to Armed Forces personnel. Consumers can also find financial advisers by using services such as unbiased.com and vouchedfor.co.uk.
The Coronavirus pandemic has affected nearly everybody’s day-to-day finances and the Money Wellness Index from first direct found more than half of adults (54%) now want to become more financially resilient. This is on top of 9 million UK consumers that identify as having low financial capability (study: Financial Conduct Authority) and just over a quarter of respondents to a CISI study stating they were not confident about their financial situation.

Rachel Springall, finance expert at Moneyfacts.co.uk, said:
“The impact of the Coronavirus pandemic on consumers and businesses may well have prompted them to take a step back to reassess their financial health and there is no time like the present to take advantage of free financial planning sessions through CISI during Financial Planning Week. If consumers would prefer to do the groundwork themselves or are wondering how to keep up a regular check on their financial health, then it is worth spending some time to seek out ways to do so.”
Consumers worried about their finances or lacking in confidence can take control by following a series of steps to manage their money and debts today and for the future.