In January, yet another major company, Shell, announced it was to close its final salary pension scheme to new members. This is the latest in a long line of such announcements. In fact, there are no companies left in the FTSE100 offering such a scheme to new employees.
This is not, however, simply a UK specific issue. At a time when an increasing number of people in the world are finding themselves in serious financial trouble, combined with the prospect of living for longer, a comfortable retirement seems less and less likely for most.
What does the future hold? In likelihood, we will continue to see the retirement age rise, whilst at the same time expected income levels will be sure to fall.
This is already happening in most developed countries as they plan to increase their state retirement age. The state of Illinois in the US can be used as a stark reminder of the risks that lie ahead. In March 2010, faced with one of the country’s largest pension shortfalls, the state lifted the retirement age from 55 to 67!
During a period when debt levels are at historic highs and pension schemes being offered are becoming far less favourable to employees it has never been more important to review your pension requirements and provisions.
Even if you have a final salary pension scheme can you guarantee that it will be left untouched by the company or even the government? Ireland has recently launched a temporary tax of 0.6% per year on all Irish pension assets lasting 4 years with the aim of raising almost EUR 2 billion. As companies offering final salary schemes already face huge pension fund deficits surely something has to give…
All of this negative press has led to a general lack of confidence in the whole pensions industry. The worry is that this will cause a hesitancy in people to address a key area of their financial planning. Unfortunately, it is this delay in confronting the matter that eventually leads to substandard levels of comfort in retirement.
Take an example. If you have 30 years until retirement, but wait 5 years to begin saving towards it you would need to save 50% more per month just to reach the same pension fund (assuming growth of 7%pa).
Now, more than ever before, it is important that people wake up and take this looming crisis seriously. Ask yourself one simple question: Hand on heart, can you be absolutely sure that your government or the company you work for will provide enough of an income in retirement for you to live comfortably?
If the answer is no then we are here to help. At Liberty Wealth we can help you with the entire retirement planning process. We can help you understand what you have and what it will be worth to you in the future. We can help you consolidate old pensions from previous employers or indeed countries. We can then help you work out if you are doing enough to achieve the level of income in retirement that you need.
If you have a serious shortfall to your retirement provision (most people do!) allow us to help you find a solution. There are many avenues available in today’s financial world to ensure that your lifestyle does not deteriorate sharply once you finish working.
As we are a completely independent and unbiased financial advisory company we will work diligently on your behalf to find a solution that matches your exact requirements.
Don’t delay, contact one of our Retirement Experts on 0041 (0) 22 341 3421 or email us at firstname.lastname@example.org and allow us to give you the greatest gift ever….complete peace of mind.