Scotland’s retirement worries

Seize the opportunity to better your tomorrow

Having these concerns isn’t always a bad thing, as it can be the prompt you need to seek advice or change your approach. As wealth managers, we speak to clients in a wide range of situations. Some have significant opportunities to improve their situation, others need small refinements and the reassurance that they’re on the right track. Here are some of the options we might discuss. 

• Putting away more money

  If you are still some years away from retirement, there’s plenty you can do to boost the value of your pension savings. The most impactful would be to increase your pension contributions.

  If you can’t afford to increase your contributions at the moment, it’s still something you can consider in the future, although you should bear in mind that contributions you make later won’t have as much chance to grow as any you make now.  
  

• Protecting and growing your savings

  For now, we might check the fees you pay to your current pension provider and see if there’s a cheaper alternative that’s suitable for you. Paying lower fees could prevent your savings from losing value over the years.

  Another option we might consider is changing your investment strategy. It’s generally recommended to choose a higher-risk approach in the early years of retirement saving, moving to a lower-risk approach as your retirement date approaches. Taking a low-risk approach too soon could limit how much your savings can grow over time.

• Adjusting your retirement budget

  Our survey showed that people living in Scotland are realistic about their income expectations in retirement. Four out of five (80%) expect their income to drop when they retire, while only 6% expect it to increase.  

  Many people can manage to sustain their lifestyle comfortably on a lower retirement income because their costs are lower. Typically, retirees don’t have a mortgage to pay, dependent children, or pension contributions to make. If you’re expecting a very large drop in income, you could look at other expenses from your budget that can be cut, and plan accordingly. 

• Taking an income more tax efficiently

  Paying less tax will help your savings to stretch further. If you’ve already retired or are soon to retire, we would discuss the various options you have available to take an income from your pension savings. The tax implications of each option are different, so you may need help to identify which will be the most tax-efficient in your circumstances.

  This is particularly important if you’re planning a phased retirement, where you’ll continue to work full or part-time for some years, or if you have income from other sources, such as rental properties. 

• Speaking to a financial adviser

  At every life stage, there are important decisions to make about your retirement that a financial adviser can help you make. The sooner you seek advice, the more they’re usually able to help.