Why choose a Financial Advisor?
Do You Need Financial Planning?
In today's world, proper financial planning is in our opinion more important than ever!
With increasingly complex financial markets, longer life expectancies and uncertainty about Social Security and long-term health care coverage, choosing the most suitable investments could play a critical role in helping to secure your financial future.
With more than 10,000 different investments and funds to choose from, one of the most important decisions you can make about your future is to seek the advice of a qualified investment professional.
Poeople are generally living longer
According to the Department of Work and Pensions the structure of our society is changing. More of us are living longer than ever before.
Life expectancy has been growing steadily for over half a century and the UK has now reached a point where there are more people over State Pension age than children below the age of 16. In 1950, a man aged 65 could expect on average to live to the age of 76. Today, he can expect to live to 87, and by 2050 to 91. By 2030, people over 50 will comprise almost a third of the workforce and almost half the adult population. While the population aged 65 and over will account for 23 per cent of the total population, an ageing society is no longer on the horizon; it is here with us today.
'State Pension: Average retirement income 'less than minimum wage'
In 2011-12, a single person can get up to £102.15 a week basic State Pension.
Someone on the minimum wage of £5.52 an hour earns a little more than £220 a week before tax for a 40-hour week. Britons retiring today are expected to be living on less than half the national average wage, in a further sign of the UK's worsening pension crisis.
Many will not be able to retire, just not yet anyway
Data complied by Aon, an employee benefits consultancy, show that the expected retirement income for those now aged 60 is just £12,021 per annum, or £231 per week.
This is 52% below the 2008 average annual UK wage of £24,908 or £479 per week, as recorded by the Office for National Statistics.
With an ageing population, it is no surprise that the Government is forced to cut benefits and extend retirement ages. Current proposals aim to increase the state retirement age to 68.
Savings, what savings?
The average person's savings would last for 52 days if they found themselves out of work, a report by the Yorkshire Building Society has suggested.
Monthly outgoings hit £1,445 for the average person in the UK but they only had £2,474 in accessible savings.
A survey of 2,000 people found a fifth did not know how they would manage if they lost their job, another fifth said state benefits would be enough.
A debt charity says that advice is available for those in trouble.
The survey found that 36% of people asked would run out of money within 11 days if they found themselves jobless because they had savings of less than £500.
How much money do I need to retire?
Obviously this depends on your expectations in retirement. As a rule of thumb, you should be able to achieve an income of around 5% a year from your cash assets (pensions, ISAs etc). Thus, if you have £100,000 this would equate to roughly £5,000 per year. Of course, this all depends on the age you are, how much risk you want to take and so on.
Want some help?
What this means is that the traditional retirement no longer applies. We are more active, and live for longer; therefore we need more money and probably want more flexibility.
Financial planning is about breaking your financial life into manageable chunks so you can make progress in all of these. Your plan will allow you to prioritise your needs, so that the most important are dealt with first.
We work closely with our clients to develop and maintain their financial plans. If you would like some help in preparing your plan, please contact us.