We try to avoid scare headlines around here as much as possible, because personal finance shouldn’t be scary. Important yes, but scary is another animal entirely. Anyway, there’s a new study going around the wire about how one in five UK would-be retirees are going to be below the poverty line this year. That’s a pretty big number of people that are going to be relying on the state pension. That’s a little over a hundred pounds a week. That’s not a lot of money to live on, and prices are rising higher and higher. It’s a big drain on the system, and it’s impossible to even imagine the turmoil that it causes other people.
What you need to do right here, right now is to think bout your own financial blueprint. Are you honestly taking care of your debts? Are you really connected to everything going on? If you’re not taking care of your finances the way you need to, you’re going to find it very difficult to actually get any work done. You’ll just end up spinning in circles, hoping that everything works out properly. That’s really not the way to go, because it’s too stressful. You’re better off thinking about your own needs and how you’re going to get things working properly in your favor. That’s really what this is about, isn’t it? It’s about making sure that you have all of the cards moving in your direction, to the best of your ability. Having a sharp plan helps you take care of that in the best way possible.
You’re going to want to make sure that you are saving real money and making sure that it’s protected against inflation. Gone are the days of the very generous final salary, where you knew that you would have a percentage of your final salary to live on. These plans do exist, but they’re extremely rare now.
You might also want to consider starting your own business to have revenue coming in even when you no longer want to work. There are some passive businesses out there, but you’ll have to use your imagination to get them off the ground. This isn’t an option for everyone, especially if the idea of running your own show is a bit scary. You just have to make sure that you’re thinking about everything that could affect your retirement.
The study in question was conducted by Prudential, where they conducted nearly 9,000 interviews with people who are 45 as well as doing another thousand interviews that just had people retiring this year.
14% of retirees coming into things this year will have to hope for state pension, because they don’t have any pension to rely on. That’s absolutely horrible, and the reality is that there are a lot of factors in play. Please do not assume that we’re making fun of anyone that is currently below the poverty line. But if you are looking at the same news headlines, don’t just ignore them. If you still have some time before retirement, really consider revving up your savings. If that means that you have to go without a few creature comforts, you’ll be okay. It just means that you’ll appreciate them more in retirement. Good luck!