Are you heading for 12 years of poverty?
Research by HSBC shows that UK population expects to spend 19 years in retirement but their savings will run out in 7 years.
Out of 15 Countries surveyed, only Egypt has a lower percentage of regular savers. The main reason being the cost of day-to-day living.
The research revealed that UK people want a retirement income of 73% of their working life income but 66% of the population are not saving enough.
Perhaps the most shocking statistic is that 81% of the population do not have a professional prepared retirement plan. However, 47% of people that invest in a professionally produced plan end up saving more.
The biggest retirement fears are financial hardship and poor health.
Business owners are in a unique position. They have the opportunity to create more income to fund retirement and capital value by developing their business.
Many of the ways to develop a business are low risk and cost little or no money.
The five actions recommended by the research are:
Step 1 – Get real about your retirement needs
With life expectancy increasing and the cost of living increase while investment returns falling it is time to put together a personal cashflow forecast to the date of your death.
Step 2 – Put your priorities in order
With 43% of people choosing to save for a holiday rather than their retirement, a change in spending patterns maybe required.
Step 3 – Be aware of major life events
When planning take account of major life events like starting a family, getting a deposit to buy a home, kids education and marriages.
Step 4 – Have a written plan
Commit to having a written plan and start saving now, even if it is small.
Step 4 – Ge professional help
The research makes it clear that professional advice pays. Looking at respondents with average incomes, those who use professional advice when planning their future have the greatest levels of retirement and other savings.
Although Sackmans is not regulated to advise you where to save, we can play a valuable role of working out how much capital you need to accumulate.
We can also explore the role of your business with a business valuation and profit improvement plan.
Our goal is to have all our clients in a position of financial freedom and security.