Independent Financial Life Planners Bishop's Stortford: Redefining retirement

Tuesday, 3 May 2016

Redefining retirement

If you are part of the younger generations the idea that retirement starts at 65, and will be a time of financial security and adventure might need reviewing. If you’re not retiring in the next decade your old age might look decidedly different says Alistair McQueen, retirement expert at insurer Aviva. He says younger generations need to take heed of the Turner Report, which suggests they will have to save more, work longer and retire with less money.

He also said that retirement has changed dramatically since the days before the state pension, and even since the state pension was introduced. ‘Before the 1900s, retirement used to be a time of poverty.’ ‘Then when the welfare state was introduced in the 1940s, you had five years or so in retirement, and it came to be seen as a rest period. ‘Then people began to live longer and retirement was seen as a reward now, since retirement has lasted 10 or 15 years it has become a right that people get to enjoy a great time of adventure, freedom and leisure.’ McQueen thinks the current retirees are an ‘abnormality’.

The main difference between current retirees and future retirees is the demise of defined benefit (DB) pensions, also known as final salary pensions. DB pensions are workplace pensions that pay out a percentage of final salary multiplied by the number of years worked. These pensions have been replaced by defined contribution (DC) pensions which are far less generous. On the whole, those saving into a DC pension would have to save far more than those saving into DB pensions in order to get the same income in retirement. If you are looking to put aside more for longer, Enable’s IFAs can try and help you make the right choices for your own personal situation.

Source: New Model Advisor

Issued by: Enable Independent Financial Life Planners •  25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

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