52%
are concerned that they won’t have enough money for the retirement they want

Retirement should be a time to enjoy and make the most of days free from work, without the stress of making money. To ensure that’s the case, most pensioners need savings to deliver an income in addition to the State Pension (which currently provides just over £11,500 a year to those with sufficient National Insurance contributions).

According to our recent survey, more than one in two people in the UK are concerned that they won’t have enough money for the retirement they want, and that number rises in Scotland. Let’s take a closer look at those numbers before discussing some options to consider.

 

68%
are concerned about not having enough money for retirement
62%
are worried they could run out of money

Scotland tops the table for retirement concerns 

Scotland is the region of the UK where people are most likely to have doubts about their retirement funds. More than two-thirds of the Scots we surveyed (68%) are concerned about not having enough money for retirement. Nearly as many (62%) are worried they could run out of money.  

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.

 

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.

Disclaimer

The contents of this article do not constitute a formal recommendation or personal advice and no action should be taken, or not taken, on account of the information provided. Opinions, interpretations and conclusions represent our judgement as of this date and are subject to change. Opinions, interpretations and conclusions from ArtTactic are not those of Investec Wealth & Investment.

Investec Wealth & Investment (UK) is a trading name of Investec Wealth & Investment Limited which is a subsidiary of Rathbones Group Plc. Investec Wealth & Investment Limited is authorised and regulated by the Financial Conduct Authority and is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street. London. EC2V 7QN.