The UK State Pension pays out no more than £113 per week. In today’s economic climate, this is insufficient to meet the costs of living, including groceries, heating, utilities and clothing. One way to demonstrate this is to look at the Consumer Price Index. In June this year, for example, the CPI rose by a drastic 1.9%. With such rises in the cost of living occurring at a time of deep national debt, pensions and other state benefits are being squeezed. This, of course, raises an important question: what can you do to protect yourself?
The answer is simple: start saving. If you’re young, then it may be tempting to put off saving for your retirement. However, the sooner you start, the greater the benefits you stand to accrue. The tax system favors those who start saving for their retirement at a young age. The state offers 20% tax relief to basic rate payers and 40% relief to higher rate payers. Ergo, the earlier you start making provisions for your retirement, the more money you’ll save in tax and the greater your accumulated wealth will be when you need it.
Planning for your retirement can be a daunting prospect. Utilising the expertise of Cedar House Financial Services can help you select and implement a retirement plan that chimes with your specific needs, including what level of financial risk you can accept regarding your savings and investments.
Regardless of your income or existing savings, it’s vital to make provisions for your retirement as soon as you’re in a position to do so. Not only will this secure your future and protect you from having to rely on the State Pension, it will also provide you with significant taxation benefits and improve your financial position overall. In the current economic climate, the question isn’t whether you can afford to start saving, it’s whether you can afford not to.
Richard Kafton