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Financial Wellbeing –
Millennials lead the way with retirement planning
Our exclusive wellbeing research highlights some big knowledge gaps for those planning for retirement. But Millennials are the most engaged group with their retirement planning.
One of the best pieces of advice you could give, or receive, is to start saving for retirement as soon as possible. This is one of the cornerstones of long-term financial wellbeing.
The effect of compounding – assuming annual growth – means you have a better chance of exponentially growing your retirement pot over time if you start saving at an early age.
This is even more important because those planning for their retirement in 2024 are reliant on what provisions they can make themselves. The state age of retirement keeps increasing and most people nearing retirement do so without the guaranteed income stream of a final salary pension.
My message is clear: if you want a comfortable retirement, it is up to you. Do as much as you can, as early as you can.
How much should I have saved for retirement?
Across our survey of high-net-worth individuals, the average amount that people felt would give them a comfortable retirement was £900,000. Despite this, only 61% know how much they currently have in their pot.
£900,000
Is the average pot required for financial peace of mind
61%
Know how much they have in their pot
This is concerning. Our respondents know what their goal is, but many have not recently checked in on their progress.
At Arbuthnot Latham, we book a regular review with clients to track performance and to find out if their goals have changed. We also use a process called ‘cash flow modelling’ to highlight how changes in your financial circumstances – such as receiving an inheritance or opting a lower salary – can impact your ability to achieve your retirement goals.
Which age group are best at retirement planning?
This might surprise you...
Of the high-net-worth individuals we surveyed, the youngest age category seemed to be taking the most prudent approach to securing their long-term financial wellbeing. As Millennials might say, ‘they’re all over it.’
We asked, “As a percentage of your salary, including employer contributions, how much do you save towards your pension each month?” The average for all age categories was 18.55% of their salary, but for Millennials (35-44), it was a whopping 27%.
Monthly contribution towards personal pension:
18.55%
All age categories
27%
Millennials
Across our survey, 61% of people know the size of their pension pot, but for Millennials, 91% say they know the number.
And this diligence is inspiring confidence…
In answer to the question, “Do you believe your pension pot will enable a comfortable retirement?”, 100% of those aged 35-44 said “yes”, the average was 83%.
How should I approach retirement planning?
At Arbuthnot Latham, we understand that everyone is different. Nevertheless, we play a pivotal role in helping our clients plan for retirement and achieve overall financial wellbeing.
A dedicated wealth planner will take the time to understand your ambitions. Using this knowledge, they will then create a bespoke long-term plan, built around you.
However, if you are planning for retirement there are a few simple tips to help you stay on track:
- Consider what sort of retirement you want. How much will you need for day-to-day living, and for life’s extras?
- How much are you putting aside now? Do the tax advantages available make it more attractive to save more?
- Are you on track? Consider what you need your final pension pot to be and perform regular reviews.
Are you ready for retirement?
Helping you go further
The good news is that where there are concerns or problems, there are also solutions. We work with our clients to create a long-term financial plan, designed around their specific needs. Our aim is to support and empower them to take ownership of their financial wellbeing.
Take control of your financial wellbeing
Our research has shown that wealth alone does not equal financial wellbeing. Knowing you have an expert to support your journey can give you peace of mind and ensure you are on track to meet your financial goals.
Speak to us to today by completing our enquiry form or calling us on the number below.
DISCLAIMER
This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.
The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.