So, how can Britons make sure their money in retirement “lasts forever” and is “sustainable for the rest of their lives”? Speaking exclusively to Express.co.uk, Andy Russell, CEO of Wealthify, suggested some tips.
The first thing he mentioned was that Britons should start as soon as possible.
He said: “To make sure your money in retirement lasts forever and is sustainable for the rest of your life, there are some simple tips that can help along the way.
“No matter whether you’re young or not-so-young, starting to pay into your pension now rather than later can make all the difference. It not only means you’ll have a longer timeline to save for, but your investments will also have longer to benefit from ‘compounding’.
“Compounding happens when profits from your investments are reinvested and are able to make profits of their own.
“Those profits could then make more profits, which then could make more profits, and so on. The longer this happens for, the greater your potential.”
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Another thing people can do is maximise their pay rises.
He explained that when someone gets a pay rise it could be worth rethinking how much they’re paying into their pension.
If someone wants to supercharge their pension, it could be worth increasing their payments in line with their salary increases, he said.
Additionally, people should keep track of their pensions.
He said: “Moving all your pensions into one place could provide you with more transparency and make things easier to manage.
“However, beware that if you have a pension with defined benefits attached (such as a final salary pension) it’s almost always more beneficial to leave it where it is. Most companies, including Wealthify, will flag defined benefit pensions with you and will not complete the transfer for your own good.”
Inflation has hit seven percent, meaning it’s important for Britons to check how they’re investing their cash.
Mr Russell explained that when it comes to workplace pensions, people might not have much of a say in how they’re being invested.
This could mean that they may not have an ethically invested pension, or that the level of risk isn’t right for them.
Mr Russell added: “My one rule of thumb is to be invested in higher risk investments when you’re young, since this gives your money more potential to grow, and you know you won’t be accessing it for some time.”
Additionally, Britons need to figure out how much they’ll need for their dream retirement.
He said: “There are lots of pension calculators out there that help you to determine how much you’ll need for your retirement.
“Before using one, consider what your dream retirement would look like, the age you would like to retire, and how much you’d need to make it a reality.”
Lastly he suggested that Britons should consider how they’ll withdraw their pension.
Mr Russell concluded: “Think of your pension as a large piggy bank – if you smash it open and spend it all at once, then it’ll run out pretty much instantaneously.
“But if you only take small bits at a time, then you can make it stretch out a lot longer.”