New research by Legal & General has revealed the scale of the UK’s midlife pension challenge. An estimated 5 million people in the British workforce have not prepared adequately for retirement. If you have under-saved and are retirement planning in Cheshire and Oswestry, it is not too late to plan for a more financially rewarding life after work.
People aged between 40 and 54 are particularly vulnerable having entered the job market at the ‘wrong’ time. Too young to have benefited from the cushion of final salary schemes and too young to have fully signed up to auto-enrolment initiatives, this generation missed out on pension eras available to older and younger colleagues. Moreover, many of those in this category only started saving after the age of 35, meaning they have had less time to create a suitable pension pot.
L&G’s research has found that people aged between 40 and 54 still have time on their side. Someone aged 47 who pays into an auto enrolment pension now, could at 8% build up a £116,000 fund by age 67. Under auto enrolment rules, workers contribute 4% of their qualifying earnings. This is from £6,240 to £50,270 of salary. Employers add 3% and tax relief is applied at 1%. On the basis of L&G’s calculations, such a fund could generate an income of at least £19,160 per annum.
There are many methods of financial management that can help people build an adequate pot for retirement. Speaking with a specialist wealth advisor can be an effective way of finding the best strategy for saving.
