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Retirement saving tips
Retirement Saving Tips

With the growing lack of confidence in personal pension plans and state pensions, there is mounting anxiety amongst many adults about reaching the end of their working life and particular concern about how they are going to fund their retirement. Now is the time to start saving for retirement, so that you do not face financial difficulties when you retire and are no longer working. Here are some of our best retirement saving tips!

  • Make financial plans for your retirement sooner, rather than later.

    Do not make the common mistake of only starting to think about pension plans and financial plans when you are approaching retirement age. In fact, the best age to start making retirement plans and start saving for retirement is when you are in your 20s or 30s, although it is never too late to start. Considering your retirement savings tips early will enable you to control and accommodate any changes to your working patterns. If your pension and retirement plans are in place, you can confidently change your working patterns to part time work or temporary work. This way you can plan to gradually stop working instead of being forced to work until you are physically or mentally not able to.

  • Regularly check the forecast of your retirement income.

    Whether you are saving for retirement through a pension plan or another type of savings plan, you should regularly carry out checks and updates on the income that you expect to receive when you retire. By using retirement planning calculators, savings tips, or speaking to your pension or savings advisers, you can get an accurate forecast of what you will expect to receive from state benefits, pensions, and other savings plans. Equipped with this information, you can make regular assessments and comparisons of your expected retirement income with what you will need to allow you to enjoy your retirement years.

  • Prepare a back-up plan for a possible shortfall in retirement savings.

    When checking your expected retirement income, you may suddenly realise that there will be a shortfall. If this happens, you must take action urgently if you believe your existing retirement savings will not be adequate for when you want to retire. Seek financial planning advice and savings tips immediately from a professional Independent Financial Adviser to discuss how to address any possible shortfall when you're saving for retirement.

  • Prepare plans to cover any excess of retirement savings.

    Be aware that there is a lifetime allowance limiting how much you can build up free of income tax in all registered pension funds you have. For example, this limit in the year 2007/2008 was £1.6million. When saving for retirement, keep in mind that any amount above the lifetime allowance is subject to a tax charge of 25% if taken as a pension and 55% if paid as a lump sum. In order not to have to pay a huge amount in tax, you should discuss with a professional Independent Financial to consider alternative retirement saving tips as soon as your savings have reached or exceeded this limit.

  • Think about your Inheritance Tax liabilities.

    Inheritance Tax is the tax that is paid on your estate; this mainly includes assets such as property, possessions, money, and investments. It only applies if the taxable value of your overall estate when you die is above a certain amount. In the year 2008/2009, this amount is £312,000. Tax is only payable on the excess above this nil rate band. Do not be caught out by the Inheritance Tax or IHT trap. Many people have been stung when saving for retirement by having to pay out huge amounts in IHT, mainly as a result of the astronomical growth in the value of their homes in recent years. One of the best savings tips (and ways to avoid being caught out) is to be knowledgeable about the taxable value of your estate and the rate at which it is charged.


Keep these retirement savings tips in mind when you begin to address your retirement finances, and saving for retirement is made easy!

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