Looking forward to retirement
Making sure your money continues to work long after you stop
Its unlikely that the state pension provision will be enough for most of us to
live on when we retire, so planning is the key to making sure you can enjoy a
comfortable retirement. You might have ambitious plans to move abroad. Perhaps you
want to enjoy a cruise when you stop working. Or maybe your plans are more modest
and you just want to be able to continue enjoying the lifestyle you've already built
for yourself. Whatever your dreams, you'll need to plan.
Understand your options
There are lots of different ways to save and invest towards your retirement; the
best one for you will depend on a number of factors. These include: your attitude to
risk, what assets you already have, the amount of your mortgage, current pension and
how many years you have left until you want to retire.
Pensions
Pensions are a tax-efficient way of putting money away to provide an income when
you retire. There are a number of different types available the one that's right
for you, will depend on your circumstances. Its worth speaking to a pensions adviser
or an independent financial adviser who will be able to advise you on the best option
for you based on your situation and how long you have until you retire.
Savings and investments
If you have plans for your retirement, such as a long holiday or a move abroad, or
you just want to enjoy a good lifestyle without money worries, you can supplement your
pension with other savings or investments. If you own your own home, this is a valuable
investment and may provide you with financial security when you retire especially
if you plan to downsize. Depending on how you feel about risk, and how long you have
until you plan to retire, you may want to look at some fixed-term or stock market
linked investments, which may give you a greater return than savings in the long run.
Equity release
There are lots of companies offering Equity Release schemes, which allow you to take
a lump sum from the money that's built up in your house over the years if it's
increased in value or if you've paid off your mortgage. As these schemes work in a
similar way to a mortgage, however, they may end up costing you money in interest
and fees and the interest is sometimes higher than on a standard mortgage. The
best advice is to get advice: talk to an independent financial adviser before you
agree to release equity in your property.