Are you going to need a part time job to survive retirement?
Long walks on the beach with loved ones, spontaneous fishing trips, gifts for grandkids, and relaxing after many years spent in the work place. The retirement dream, right?
This may be the dream, but how realistic is it?
State pension
The government recently announced it is bringing forward the decision to increase the age at which you can access the state pension. Those born between 1970 and 1978 will now have to wait an extra year, until they are 68, to claim the state pension. This has been bought forward seven years.
The current 'pay as you go' system (which sees working people paying for those who are retired) is not sustainable. With people living longer, the government will need to provide for a large percentage of the country, who are no longer paying into the system.
Personal pension
Following the introduction of the 'Pension Freedoms' in April 2015, retirees can access their personal pension pot from the age of 55 to spend, save or invest it as they wish. This goes some way towards bridging the gap between leaving work and receiving the state pension. However, more than two years on less people have taken advantage of the pension freedoms than was first anticipated. A recent survey conducted by Chelsea found that a little under half (48.68% to be exact) of those suveyed had opted to take pension savings at the age of 55*.
In fact, 15.79% plan to continue working and 25% were unsure of their plans.
The new norm for retirement
While many of us currently hope retirement will be filled with holidays, quality time with family and long lazy days spent pursuing new hobbies, this may not be the case in the future. It may be that only a minority are able to retire in the same fashion as their grandparents, with some people taking on part-time jobs to keep busy and supplement their pensions.
If this is the case, employers will find they also need to adapt by offering different types of contracts.
What can you do?
Saving for your retirement is important, and starting to save early is crucial. Compound interest is a vital tool in your savings arsenal. Read more here
Open a pension with Chelsea
- 0% set-up charge
- 0% initial charge on funds
- Access to over 2,500 funds
- Fund research
- Access to the VT Chelsea Managed Funds
- Competitive service and platform charges
- Free transfers in – we can help with transfer-out charges if you are moving to us
- Free telephone dealing
- Free switching online, by post and telephone
- Twice-yearly statement with unbiased and expert research commentary
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- Access to tax-free cash from 55
- 0% charge for processing probate
If you would like to open a pension with Chelsea, please complete our online questionnaire, or call Sarah Culver on 020 7384 7300.
*Chelsea survey, July 2017, 76 respondents