Retirement planning starting ten years too late warns EFG
Too many people start planning for their retirement far too late, an expert has warned.
Even more worrying, some never do, cautioned John Male, Managing Director of EFG Independent Financial Advisers, with offices in Birmingham, Wolverhampton and London.
It is recommended that people seek financial advice 40 years before retirement.
But according to recent research by Unbiased.co.uk and MetLife, 38 per cent of UK adults are currently not saving anything for their retirement and many others miss out on ten years worth when they could be doing something about it.
The average age at which people first seek retirement advice is 35-years-old when it would have been far more beneficial to have done so at the beginning of their working lives.
The average amount that adults are saving towards their retirement each month is £97, but those who took professional financial advice are saving an additional £71 per month.
Over the course of a working life, this equates to an extra £25,730 in the retirement pot of someone who took advice at age 35, even before interest and tax relief.
However, an individual taking advice at the recommended age of 25 would have an additional £34,300.
Mr Male said: “Young people are under all sorts of pressures today – reduced job security, the cost of housing and the need to pay back university fees.
“To them retirement must seem an awfully long time away. But it pays to start early. People are generally living longer and if their retirement savings are inadequate then they will struggle in their old age. So many today are dangerously under-funded.
“That is why acting quickly as soon as you are in employment is so vital even if initially you can only put a little aside. Pension saving is cumulative and compound interest over the years can make a massive difference.
“Get advice in your early to middle 20s and act on it. It will be one of those decisions in life you will be forever thankful you made.”