Rising incomes and savings pots among UK families are masking a widening gap between the ‘haves’ and ‘have nots’, the latest Aviva Family Finance Report reveals. The last six months have seen the typical family’s income reach its highest point since March 2012. Better savings habits also mean the typical family is saving a record £113 each month.
With the number of retirees going into care rising, research from LV= reveals that many people going into care could face bills in excess of the total pension pot they retired with. Over the last decade, the average length of stay in a care home has increased by 13% from 829 days to 955 days[1] – which equates to two years and seven months.
Britons consider having an Internet connection and mobile phone to be greater financial priorities than protecting mortgage and income, according to new research.
Regardless of the life stage you have arrived at, it is important to receive expert and professional advice on your pension plans and requirements. Yet many people spend more time planning their holiday than their own retirement. Perhaps because planning for retirement seems too complicated to think about. But according to people surveyed for BlackRock’s Investor Pulse survey, the biggest financial priority was still ‘funding a comfortable retirement’.
Parents are still very much in need of a reality check when it comes to the true costs of a university education according to the latest annual student debt research by the Association of Investment Companies (AIC) using Opinium Research. And while over two thirds of parents plan to help their children financially through university, many say they have to resort to drastic measures in order to do so, whether it be downsizing the family home (9%) or using their entire cash savings (22%).
If you are approaching your 50s, you may be considering your retirement options. Perhaps you want to work flexible hours and work when it suits you. You might want to be ‘your own boss’ and set up a business or become self-employed. Or you may want to know what your options are for working after retirement.
Changes to the pension rules are creating new opportunities for scams. Be cautious of anyone approaching you with advice on how to invest your pension. Almost one in ten pensioners has been targeted by financial fraudsters since their retirement.
Individuals are living longer, meaning that savings have to fund a longer period of retirement. However, there has been a well-documented decline in pensions saving over time. Many people do not think about retirement as they consider it’s too far in the future, and almost two thirds (63%) of over-45s who are not yet retired admit they pay little or no attention to their pensions, leading to more than ten million pots being left largely unmonitored[1].
A gradual reduction in the tax-free limit on pension contributions from the current £40,000 a year to £10,000 for high income individuals was announced by the Chancellor, George Osborne, in the July Summer Budget 2015. High income individuals could see their retirement pots reduced by hundreds of thousands of pounds over a lifetime after he confirmed that pensions tax relief will be reduced for those with income (including all pension contributions) of more than £150,000.
New priorities increase the protection gap
Many Britons consider that having an Internet connection and mobile phone is a greater financial priority than protecting their mortgage and income, according to new research. The economic downturn in previous years, low interest rates, job uncertainty and government cuts appear to have taken their toll on some people’s protection priorities.