Planning for your long-term financial future

The Queen turns 90 this week – happy birthday ma’am! She may be just a decade short of getting a card from, um, herself (!), but she’s clearly in no hurry to retire just yet. 

Twitter poll – what age do you plan to retire?  

It’s never easy to know how much you’ll need to have set aside for your retirement. So it can be useful to think ahead and start planning for the long-term financial future.

How much might you need?
Everyone’s circumstances are different of course, but some factors can be common. If you’ve paid off your mortgage, that would free up a large part of your outgoings. However, if you are helping to fund your children in their quest for homes/studies/weddings etc, then that can push costs right back up.

So it’s a good idea to work out your current outgoings, expenses and financial commitments and how it might be affected were  you to have a reduced income in the future. For more information, check out this guide from Saga UK.

Pensions
It’s never too early to look after your additional savings for the long-term future. Few if any of us can rely on the State Pension to keep us going in retirement, with the maximum basic State Pension (2015-16) being £115.95 a week.

According to the Money Advice Service, more than half of people in the UK don’t have any retirement savings, or they aren’t saving enough to give them the kind of standard of living they are hoping for when they eventually do retire. So putting money away, whether in a private or a work pension, can be a major factor.  And since the changes to pensions in April 2015, those aged 55+ can withdraw part or all of their pension funds.

How important is keeping your credit report in shape?
Monitoring your credit status can help you take control of your finances.  Even if you’ve paid off your mortgage and don’t have debts, it’s worth maintaining some credit accounts so that you have some recent credit history available on your report should you decide to apply for new credit in the future – in addition, credit reports are also used to help check your identity.

It can help when it comes to something like buying a new car, taking the trip of a lifetime, or perhaps helping one of your children pay for a wedding.  People will have differing income levels in retirement, which may mean that some need credit to help spread the cost of certain purchases – which is where a strong credit report can come in handy.

(updated Apr 2016, original Nov 2015)

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