Considerations For Effective Retirement Planning

Changes to State Pension and Pension Age

The new, flat-rate state pension rate is deemed to be a fairer and simpler system by Pension Minister Steve Webb. The current rate of £97.65, which can be topped up with pension credit will give way to a flat rate of £140. This new rate simplifies state pensions, will reduce the need for means testing, can help women, and low-paid workers, while also encouraging people to save more for  retirement . The government is also  planning  to increase state  retirement  age to 66 for both women and men, a reform that is in accordance with increasing life expectancy, but will foreseeably hit low-paid working men the hardest.

Rising Life Expectancy

Life expectancy is rising rapidly in the UK, and has increased by 44 days in just the last year. A child born in 2012 will on average live over 90 years, and more than 15% of the current UK population can expect to live until their 100th birthday. This rapid increase in longevity will continue to have a huge impact on public policy, including state pensions and  retirement  age. Although the state pension age is increasing, expected lifespan is also rising, so pensioners will have to  plan  for an increasingly long  retirement . This means that financial  planning  for  retirement  is becoming essential, and surviving on just the state pension for the last 10-20 years of your life or relying on your children for financial support are not the most ideal situations.

Plan Well Ahead

Starting to think about your  retirement  finances early enough is a crucial first step. While taking care of your family, paying for your children’s education and paying off mortgage loans, and possible investments should be the primary focus of your financial  planning  from your late 20s to your late 40s, try to establish a stable financial situation and keep your  retirement  in mind. Clear off all your debts, save as much as you can, think of long long-term investments, and join your company pension scheme. If you pay attention to all these factors, you’ll have a strong base for your future  retirement   planning .

 Planning  Your  Retirement  Finances

The financial decisions you make in your 50s and 60s will have a direct effect on your  retirement  income. Try to maximise your savings and pension scheme contributions, and reassess risky investments. Make  plans  about when you are  planning  to retire, and decide if you want to work full or part-time beyond your state  retirement  age. Make concrete  plans  for your  retirement  income. Consider Self Invested Personal Pensions, your annuity options and the option of unsecured pension. Any of these can provide you with a stable  retirement  income, with different levels of flexibility and risk. If you are unsure about your  retirement  options, talk to an independent financial advisor (IFA), who will be able to advise you on the best  retirement  solution for your individual situation.

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