![]() ![]() The rules changed in 2016, therefore if you reached State Pension age before 6 April 2016, you’ll get the State Pension under the old rules instead. ![]() In order to receive any State Pension, you’ll usually need to have been making National Insurance contributions for at least 10 qualifying years. Your State Pension is paid out every four weeks once you reach 66 years of age (as of 2021). These are set to increase in 2022, with the basic State Pension increasing to £141.85 per week and the full rate of new State Pension increasing to £185.15. In the UK, the full basic State Pension is £137.60 per week and the full new State Pension is £179.60 per week, as of 2021. Consulting with a professional financial adviser can help you to calculate your likely expenditure, and provide bespoke retirement advice. In general, people are living longer and so you may have to pay for long-term care or other forms of healthcare, in retirement. It is also worth considering any unexpected costs in your estimations. On the other hand, overall spending may drop, as some retirees simplify their outgoings or downsize their property. This is likely due to the fact that new retirees tend to have more free time to spend on hobbies and leisure activities, or taking longer or more frequent holidays. On some occasions, retirees end up spending more overall in retirement than they had previously. As part of your retirement plan, you should consider the type of lifestyle you wish to maintain, and factor in the additional costs you may encounter. When you retire, you may find that your monthly expenses change. Of course, how big your pension pot will need to be, depends on how long you end up living – the average life expectancy for a person born after the millennium is estimated to be around 100 years old, so you may end up needing more than you originally expected. They also included a more luxurious lifestyle, including things like expensive meals out, buying a new car every five years, and longer holidays.įor retired couples the average yearly expenses were calculated as:įor single retirees, the average yearly expenses were: This was calculated by including all of the essential payments, such as groceries, utilities, housing costs, and transport, as well as spending on things that can provide a more comfortable lifestyle like leisure activities, and regular short holidays. In a recent survey of 6,800 retirees conducted by Which?, they found the average annual income necessary for a comfortable retirement is £26,000 per year. If you are single, you’ll only have the one state pension to supplement your pot, but you’re also likely to have lower overall monthly outgoings. Whether you live alone or have a partner will also affect your targeted income. The lifestyle you have in mind will directly influence how much you’ll need each month, and therefore how much you’ll have to contribute to your pension. You might be happy with simple pleasures and have little outgoings, or you might want to travel abroad on several holidays each year. It’s difficult to say how much money you need to be comfortable in your retirement, as everyone has a different idea of the life they want to lead. ![]() Let’s take a look at your options, to help you to work out your approach to your retirement plan. The sort of lifestyle you hope to lead after your retirement will also have a large influence on how much income you’ll need each month. It all depends on how much you earn, how much you work, and how much you’ve been able to put into your pension fund. Planning for your retirement can be a pleasure, but it can sometimes also be a source of anxiety. ![]()
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