There are two main threats to your income in retirement.

1. Not saving enough now
2. Inflation

 Consider these facts:

• During 2010, of the 450,000 pension annuities that were purchased in the UK, less than 1% were over £200,000 in value. (HMRC data).
• A 65 year old man would need a pension fund in excess of £200,000 to provide an income of £12,500 per annum.
• When the current system of pensions was set up, most people lived less than 10 years after retiring, but these days with vastly increased longevity, it is common for people to live another 25-30 years, or even more.

 Whilst many of us are aware that we are probably not saving enough for our futures, do we really know just how big a shortfall there will be?

Inflation erodes purchasing power over time to a far bigger extent than many people realise. In simple terms, your income will reduce by half over a twenty year period even with inflation running at just 2%.

Whether you are saving by means of traditional pensions, offshore savings schemes, a portfolio of stocks and shares, property, a combination or even some other method, chances are that you are not setting aside enough for your future. As state pension lose their value in real terms and traditional company schemes are closed, the onus is fully back on the individual to look after himself.

The earlier you start saving, the less you will ultimately need to set aside as compound growth will make a significant contribution to your final fund. If you leave it too late to provide for your later years, then there is a good chance that you will not have time to accumulate a fund large enough to provide the level of income that you would like once you stop working.

There are many ways of planning for the future, but the earlier you start planning the higher the chance of having a comfortable retirement. And when you consider that retirement could easily last over 20 years, you really will want to be in a position to enjoy it.

If you have concerns about your financial future, come and have a no-obligation chat.