According to research carried out for the Pensions Policy Institute, many pensioners are relying on their state pension for three-quarters of their income.
It can come as a shock to many that their state pension entitlement increased to £164.35 per week from April 2018, but only for those who have a complete record of National Insurance contributions, meaning that some people will receive less. On top of that, the government announced last July that the state pension age would be increased to 68 between 2037 and 2039.
Why we all need to plan ahead
We’d all like to look forward to a comfortable retirement, but sadly many people don’t realise until they come to retire that they don’t have sufficient money saved to enjoy life to the full. With the onus on all of us to provide for our later years, it pays to make time to check up on how much you’ll have to live on in retirement. If there’s likely to be a shortfall in your savings, the earlier you spot it, the easier it should be to fix.
If you find yourself facing a likely shortfall, there are various things you can do to address it. The longer you have before retirement, the more time you’ll have to boost your pension pot. If you’re employed and haven’t joined your workplace pension scheme, you should think about doing so. By the end of 2018, all employers will have to provide a pension that they, as we as you, contribute to. If you’re already a member of a pension scheme, you could consider increasing your contributions to improve your pension outlook or take out a private pension policy.
Many people are now realising that it is never too late or too early to start retirement planning and getting your pension on track.
Pensions Policy Institute, 2018