If you were to believe the news, you’d think that the UK is being gripped by a private and public sector pensions crisis.
There’s certainly an element of truth to this, with around 80% of Brits failing to save enough to support them in their retirement.
If you belong to this demographic, you’ll need to take proactive steps if you’re to build successfully towards your retirement. Here are a few tips and strategies to help you on your way:
Focus on Earnings Rather than Savings
In recent times, it has become increasingly difficult for people to save towards their retirement. There are several reasons for this, from a sustained imbalance between earnings and inflation to the failure of banks to share base interest rate increases with their customers.
With this in mind, it may be worth switching your focus from savings and instead concentrating on optimizing your earnings.
By creating additional and passive income streams in addition to your annual salary, you can increase the amount that you commit to savings and build your pension pot incrementally.
Leveraging a marketable skill as a freelancer can be extremely rewarding, for example, as can creating a diverse and passive investment portfolio that delivers margin-based returns.
Start Saving at an Early Stage
While you should definitely focus on adding new revenue streams and boosting your earning potential, this does not mean that you should disregard the concept of saving entirely.
In fact, it’s imperative that you commit as much of your disposable income to savings as possible, while also starting to build your pension plan at an exceptionally early stage.
This means depositing a fixed percentage of all earnings to savings, from the moment that you enter the employment market for the first time.
It may also be worth creating a private or personal SIPP (self-invested pension plan) at a young age, before transferring separate workplace funds into this account as and when required.
Get Informed and Seek Out Expert Advice
Once you’ve begun to increase your annual income, the next step is to ensure that you’re making the most of this capital.
The best way to achieve this is to partner with reputable financial experts and wealth managers such as Sanlam, who can collaborate with you to create a tailored plan and strategy that helps you to achieve your unique objectives.
This type of advice can be worth its weight in gold, as it borrows heavily from seasoned financial experts and takes into account variable trends and macroeconomic conditions.