Saving towards your future is incredibly important, especially as 55% of young people have not started saving yet. This means that they could end up without the funds they need to live when they reach State Pension Age (SPA), which is what more than a third of those over the age of 65 are experiencing today.
If you want to ensure you have enough money by the time you retire, you need to start thinking about your savings goals as early as possible.
Follow these savings milestones to get the best results:
What to do in your 20s
At this age you should focus on writing off any debt you may have accrued due to overdrafts or student loans that you may have taken out. Credit card debt should also be tackled during this decade, and you should work to make consistent repayments to clear your financial history of these debts.
What to do in your 30s
During your 30s it can be reasonable to expect that you will be thinking about settling down, buying a house and supporting a family. You should also have seen a few pay increases by now though, so you could have more money to work with.
It is important that you begin putting money towards your retirement at this point. Opt into your company’s pension and also set up an ISA or savings account to put money away on your own terms.
What to do in your 40s
By now your pension plans should have built up by a consistent amount, so you can already see that you are well on your way to having a good retirement. You should begin to increase your monthly contributions though, especially if you are now receiving yearly bonuses from your employment. You should check on your personal savings as well and consider taking out a personal pension plan on top of your work and state pension plan.
What to do in your 50s
You will now be within reach of your retirement, as it is likely to be happening within the next 15 years or so. This may sound like a long time, but in terms of savings it is not. You should look at other investment opportunities so that you can get the most out of your savings, and think about looking around for better pension plan options – you can move your pension if it makes financial sense.
What to do in your 60s
Depending on your SPA, you should be retiring by your mid-60s. This means that this decade is the most important one of all, as it will be your final chance to maximise your pension plans and savings. Put as much money as possible towards your retirement fund, and also set a date for your retirement so that you have a deadline to work towards.
It’s vital that you have enough money to sustain yourself once you retire, especially if you aren’t in great health. You might find that you need to move into a care home in order to receive the medical help that you require. It could be a good idea to apply to the NHS Continuing Care scheme or for an assessment from your local authority to see if you could avoid nursing home fees.
Saving for old age can seem very boring, but you will certainly be thankful for your efforts once you retire!