Money-avoidingpension poverty

Areyou runningthe risk of outliving your savings?

Whether youhavejuststarted outonlife’sjourney,or counting thedaystoretirement, pension planningshould be high on your wealthmanagement agenda. However, youwillhave verydifferent needsand objectives depending on whichpartof the journey youare on. Theearlier youstart planning,theeasier itwill potentiallybetocreatethe retirementlifestyleyou want. Thestark realityisthatthe majority ofus need to save more.Weallmust accumulate more,whenweare earning, to meettheextracostsofliving longer.Thedecisionswemake todaywilldictatethe standard ofliving we will enjoyin retirement. Thegolden ruleisto determineexactlyhow much you aregoing to needin retirement–andtostart planning foritnow. Delayscost money, butmaking worthwhilecontributionsneed notbethatdifficult.Making pension contributionscould be seenasa necessary expense:they should notbeanafterthought. Budgeting foraregular monthly amount towardsany pension savingscouldbeconsideredas anintegralpartofbusiness or householdbudgeting,justlike theheatingandlighting bills. Rememberthatmaking annual or single contributions hasthepossibility ofbuying intothe marketatthe‘wrong’ time. Monthlycontributions helptosmooth outthe effect of fluctuationsinunit prices. Those relyingsolely on theState Pension to seethem through theirlater yearswillhave to acceptthattheirstandard oflivingis going to drop significantly. Withpeople generally living longer, retirement nowrepresents afar greater proportion of ourlivesthan previouslyexpected.TheState Pensionprovides alimited income (£179.60 forasingle person,perweek,based on a fullNI record inthe2021/2022 tax year), whichfallsdrastically shortofwhatis reallyneeded to fundacomfortable lifestyle. So howdoweavoid poverty in retirement? First, decide howlargeafundyou will need. Onemethodis to multiply your target retirementincomeby25. Forexample,ifyou think you’ll need£30,000 ayear,aim fora fundof£750,000. Next,selectthemost appropriateinvestment vehicles to help achieveyourgoal. Property,investmentbonds and ISAshave all provedpopular over recent years butdon’toffer thesamedegreeoftax breaksas a pension. To help avoid running out of money,selecting abalanced andwelldiversifiedinvestment portfolio is critical, butknowing howmuchmoney to take from a drawdownpolicy isarguably of greater importance. There’s no better timelikethe present for youtoconsider howtoenhance or protectyourwealth whilst thinking about your retirement. Thevalueofaninvestment withSt.James’sPlacewill bedirectlylinked to the performanceofthefunds selectedandmay fallas wellas rise. Youmay getbacklessthan theamountinvested.

Thelevelsand basesoftaxation andreliefs from taxation can changeatany timeand aregenerallydependenton individualcircumstances.

Formoreinformationabout wealth management and retirement planning, contact Robert DrakeatAnglian Wealth Management on 01603752500 /07581347559, or email robert.drake@sjpp.co.uk

ThePartner Practice isan AppointedRepresentative ofandrepresents only St.James'sPlace Wealth Managementplc (which isauthorisedandregulated by theFinancial Conduct Authority) forthe purposeof advisingsolely on theGroup’s wealthmanagementproductsand services, more detailsof whichare set out on theGroup’s websitewww.sjp.co.uk/products. The‘St.James'sPlace Partnership’andthe titles‘Partner’ and‘Partner Practice’are marketing termsused todescribeSt.James'sPlace representatives.