A Brit, a Frenchman, an Italian, a German and a Spaniard walk into a bar. Which one of them has saved the most for their retirement?
According to a new report from M&G Wealth, it isn’t the Brit. Whilst almost 25% of Britons surveyed stated that they were saving as much as they can each month, in Spain it’s 31%.
Equally, whilst 33% of Brits said that affordability was the main barrier to their ability to save any more, this was higher than in the other European countries:
- Italy (22%)
- Germany (27%)
- Spain (27%)
Cost of living and women’s pensions
The cost-of-living crisis (COLC) impacts women disproportionally, especially those who had taken a career break. 21% of women surveyed said that they would need to work beyond the state pension age, compared with 15% of men. According to the survey, only 9% of women surveyed had a private pension in place.
OK Paul, what are you getting at here?
Why am I sharing this with you? After all, if you’re reading this blog, chances are you already have your pension plans in place, have an idea of your “Number” and realise that retirement isn’t just about the finances.
However, your children may not, and your grandchildren, probably not. They’ll be looking at their current pot of savings, investments and more, and thinking about current cash flow, rather than planning ahead.
In all fairness, their concerns may also be yours: working out how to pay for utility bills that have doubled or more, rising inflation, paying more at the pumps, and how to eat healthily and affordably when food costs are rising faster than most of us can keep track of.
The truth is, as you already know from your own experience, that this economic crisis is just the latest in a long line of financial peaks and troughs that you, your savings and your pension pot have experienced over the years. Share prices have taken a rollercoaster ride, interest rates have stagnated and risen from the ashes, and pensions have been under threat more times than we care to remember.
Yet viewed over the long term, with a little management, you should be winning in terms of the money you put in and your savings’ current value.
So, if you’re going to give a gift of long-term worth this Christmas to the next two generations, tell them your story. Use your finances to show that long-term planning helps smooths out the lumps and bumps of political policy mistakes, the price of oil, and actions by world leaders beyond our direct control (if not our condemnation).
It may not be the most thrilling or festive of discussions, but it could be one of the most important.
Three ways to (relatively) pain-free pension savings
Sit down with your children (especially your daughters and granddaughters and pre-retirement female in-laws) and share these three ways they can save a little more without too much pain.
1. Top up your workplace pension. If you can save just a little more, your employer might match it, doubling your investment.
2. If you have several small pensions dotted across multiple providers, it may be more effective to bring them together in one pension instead. Check with your financial advisor before doing this, as here may be hidden fees, etc. If you are unsure what pensions you have, it’s worth checking if any pensions have got “lost”.
3. Contribute when you’re not working. Again, it’s about a small amount saved regularly, to keep your pension pot growing thanks to the accumulation impact of compound interest.
Gift a consultation with me
If you have no idea what to buy for your adult children this Christmas, why not gift them a consultation with me? In my capacity as a financial planner, I can help them take stock of their finances, and develop strategies to increase their wealth and worth. Then, as an experienced and qualified retirement coach, I can take them through the process of planning a retirement with purpose, to motivate them to see their future years as an opportunity, not an endpoint.
Like the idea of the gift of advice?
Contact me to discuss how we can make this happen for you, your family and your grandchildren.