Experts estimate that around £ 30,000 per year is needed for a comfortable retirement, and for many that will translate into more than £ 600,000 in retirement savings needed when they leave the workforce. It might seem like an overwhelming estimate, and with inflation it will likely increase a lot more in the years to come, but Romi Savova explains why prioritizing your pension now can make saving for retirement a lot easier on the job. to come up.
Ms. Savova, Founder and CEO of online pension provider PensionBee, shared her tips for getting the New Year off to a good start.
She noted that many may have “Organize Finances” on their January resolutions list, but few see their retreats as part of their resolutions.
Ms Savova said: “By not prioritizing their retirement next year, savers could put themselves at serious risk of missing their retirement ambitions and facing a retirement deficit later in life. .
“The retirement landscape is proving increasingly difficult for future retirees: National insurance contributions are rising for those who are still working, the retirement age is rising and inflation is expected to peak at four to five. percent before the end of the year. In this difficult climate, anticipating retirement has never been more important and a little can certainly go a long way in terms of retirement savings.
Ms Savova said that instead of just trying to add an extra £ 10 or 20 to her savings, consumers should increase their contribution levels by just one or two percent of their pay.
She continued, “Over time, this could have a significant impact on their retirement fund, through compound interest. In addition, the earlier a saver begins to make additional contributions upon retirement, the longer they will need to grow into 2022 and beyond. “
Ms. Savova shared her top six tips for tracking and supplementing retirement savings in 2022.
Staying dedicated to your savings goals can be difficult when the money is simply deposited into your bank account waiting to be used.
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Ms Savova suggested that consumers should use digital finance apps like Snoop to budget properly, see their spending more clearly, and see what extra income or unnecessary spending could go to pension funds instead.
Change energy supplier
As a result of the energy crisis and with so many companies going insolvent, many are wary of the situation with their energy supplier.
However, as this is one of the biggest monthly household bills in the UK, Ms Savova noted that consumers could be much better off if they just did a few purchases to make sure they get the best. best deals.
“Switching energy providers can save households up to £ 180 to £ 259 per year, and using energy comparison sites like uSwitch can help you find out how much you could save on your retirement at home. instead, ”she added.
Ms. Savova explained, “By taking advantage of these times to buy in advance for special occasions, you can avoid feeling overly stretched during your high spending months.”
Cancel old subscriptions
While it’s only a few pounds here and there each month, subscriptions can add up to hundreds of unnecessary expenses each year that could instead be used for retirement savings.
Ms Savova said: ‘Recent research has found that 21% of people in the UK pay £ 265 each year for subscriptions they no longer use. These unwanted subscriptions, such as gym memberships and online streaming services, could put undue strain on household finances. “
Retirement investments must be controlled, regardless of their duration, passive or risk-free.
Additionally, investors who invest in their beliefs are advised to check where their money is actually located to ensure that the companies they are investing in match their values.