A new survey has revealed that 65 per cent of 35-50 year olds do not believe they will have enough income to enjoy retirement and three in four feel less financially secure than their parents.
The survey also revealed that 52 per cent of Generation X try to save for the future, but do not feel sufficiently prepared. 17 per cent said they don’t plan at all and 6 per cent claim they will be relying on their inheritance.
It is estimated that between half and two-thirds of an annual salary earned before retirement is needed to maintain a similar lifestyle, which, by today’s standards, translates to around £25,000 per annum on average.
Stewart Pope, CEO at Perrys Chartered Accountants, is urging people to plan ahead and think about the possibility of changing circumstances, particularly when relying on unpredictable sources of wealth such as inheritance. He explains that the average life expectancy in the UK of more than 81 years, combined with the increasing costs of residential care (over £29,000 per year on average) should be taken into account when planning for the future.
“Whilst maintaining your current lifestyle is always the first consideration, it is also important to be aware of the other possibilities that life can throw at you, such as ageing relatives, long-term illness, and the possibilities of parents’ residential care wiping out any future inheritance.”
The recent introduction of auto-enrolment for employee pensions is hoping to address some of the issues we face as an ageing nation. However, only a quarter of the Generation Xers surveyed felt confident in pensions as a future investment with 40% saying that investing in property would be their first choice.
But the Government’s latest changes to tax regulations and the significant increase in the stamp duty charges paid on second homes are making property investment a more difficult and expensive prospect for many.
Stewart added: “It is worth taking a look at your existing assets to see how you could maximise potential for the future. With the right advice and some effective tax planning you could find that this makes a longterm difference to the shape of your financial future.”