It has been calculated that couples will need to find an extra £2,200 a year to maintain their standard of living post-pandemic, according to the pension’s industry research.
The estimates show that a basic standard of living for a couple now costs £16,700 per annum, a moderate lifestyle requires £33,600 per annum, and a comfortable lifestyle would needs £49,7000 to fund it.
This is a rise of 4.6 per cent from 2019 and, with the latest inflation figures, this is likely to increase substantially in the near future.
A comfortable lifestyle includes luxuries such as regular beauty treatments, theatre trips and three weeks of holidays in Europe, with £1,200 per annum allocated to clothing, a 2-year-old car replaced every 5 years and an up-to-date kitchen and bathroom every 10 to 15 years.
So, what can be done?
If you are not yet retired, then increasing or starting a pension plan is a must. You need to map out exactly what you intend to do in retirement so that you can put a figure on what you need. Thorough budget planning and cash flow analysis will ensure that you have a full understanding of your expenditure, but constant monitoring is required to ensure you remain on track to achieve your goals.
Understanding your State Pension is also vital, as this can add up to £185.15 per week to your income, thereby reducing what you need from your other pensions. If you are missing a few years of National Insurance contributions then it may well be worthwhile making catch-up payments, known as voluntary Class 3 contributions. We can assist you in getting these sorted.
Finally, ensuring your pensions and investments are invested in the most suitable funds is a must – this does not necessarily mean the best performing funds, but the ones that have the right risk profile for your situation.
You can do this yourself but having someone who is independent and not emotionally associated with your money – who also has the necessary tools to analyse everything accurately – has got to be preferable.
And that is where we come in! At Foresight, we always work with your aims and objectives in mind and can provide real peace of mind for you to make the right decision regarding your retirement. So, please get in touch.
