July 31, 2008 Leave a comment
We were on the radio again at the beginning of this month. This time we were asked to comment on the findings of the Cost of Retirement Report from Life Trust Insurance which estimated that it requires a pension pot of £413000 to support a comfortable 20-year retirement for a couple or £327000 for an individual living alone.
This is one of a number of such studies being published at the moment which, not surprisingly, come up with quite a range of estimates bearing in mind how many assumptions have to be made and how different these assumptions can be.
However, what is of real significance is the fact that so many people, even those relatively close to retirement, have not thought and are not thinking that far ahead. The reality of retirement is now hitting people big-time and is coming as a major shock to many. Yes, there is the state pension but this is woefully inadequate to support a reasonable lifestyle. And, with the direction of property prices so uncertain at the moment, the notion that this will provide all the retirement capital we need is losing its appeal, at least temporarily.
But what is really beginning to dismay government, institutions and individuals alike is the underlying complete order of magnitude lack of understanding of what it’s going to take to see us through our later years. This is what must be addressed as a matter of urgency.
What we are looking at this month is what, on a personal level, you are going to do now – what can you do to be better prepared for retirement.
It’s very easy, but of no practical use, to say that we really should have thought of this before but, in reality, many of the changes, in particular longer life expectancy, have only just become apparent. However, we must believe that it’s never too late to do something – so let’s start now.