As many individuals worry about the most effective method to prepare for their retirement, it can often be comforting to listen to experts in the field.
The i Paper has consulted three professionals in the pensions field, regarding their strategies for retirement.
Below, each outlines their plans and how they intend to proceedretirement saving journey has gone so far.
David Gibb, a certified financial advisor with Quilter Cheviot, 43
I have at least 20 more years – possibly even longer – until I reach retirement, so I haven't fully outlined how I will manage my income during that time. However, as a single parent to two daughters, one of whom has autism, my main concern isn't just planning for retirement funds – it's ensuring I can provide something valuable to help them throughout their adult lives.
That's why I plan to choose a drawdown [taking money from a pension while the rest remains invested] instead of an annuity [purchasing a guaranteed income for life], because of its better death benefits and the flexibility it provides.
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Currently, I am putting in as much as I can towards my pension, along with the contributions from my employer.
I also contribute to an ISA [a savings account where interest is tax-free] and, somewhat delayed, started a Lifetime ISA at the age of 39 [see more about LISAs hereTo take advantage of its tax benefits. It's not as effective as a pension, but it allows me to spread out my choices – particularly with the pension's tax-free cash limit set indefinitely. I am aware this might change in the future.
In terms of investments, I strongly support 100 per cent equity portfolios, where funds are directed towards stocks of companies, especially during the accumulation period – this is precisely how I have organized my own portfolio.
The objective is long-term development, and I am willing to face market fluctuations to achieve it.
I used to believe I would get a state pension when the time comes, but I'm not as confident now. With the retirement age expected to increase once more and increasing discussion about possible means testing, I've begun preparing under the assumption that it might not be available—or at least not in the same manner as before.
Craig Rickman, personal finance editor at interactive investor, aged 42
Having entered midlife a few years back, my approach to retirement savings now needs more precision. I am fully conscious that these are critical years for ensuring I set aside sufficient funds to enjoy a comfortable lifestyle in my later years.
I am eligible to claim my state pension at the age of 68 in the year 2050 – assuming the government does not change the current schedule during its upcoming review. Nevertheless, I understand that delaying the receipt of the pension might be an option, and I will modify my retirement plans accordingly if this happens.
I recently obtained a state pension estimate, which was an easy and quick procedure, and discovered that I am set to receive the complete amount without needing to fill in any missing parts.
Regarding my personal savings, I am enrolled in a workplace pension as well as a self-invested personal pension (SIPP). In 2016, I changed jobs, which led to a pause in contributions for approximately 18 months, meaning there is some catching up needed.
Boosting employer contributions and incorporating one-time additional amounts are two methods I use to enhance my savings.
My Interactive Investor SIPP provides a wide range of investment options, but I usually stick to a straightforward approach.
A significant portion of my savings is invested in global indices [which track the performance of specific stock markets], while a part is directed towards UK small-cap stocks and developing markets to introduce some variety.
I avoid more defensive assets such as bonds [investments in government debt] since growth is my primary objective at the moment.
Secure assets typically provide lower profits over an extended period but are generally considered to carry less risk.
A few years back, I combined multiple pensions into my SIPP, which has turned out to be a wise choice because it's now much simpler to handle and keep track of.
In the future, although I am at least a few decades away from needing to access my pensions, I intend to remain invested in retirement and manage my income in a flexible manner, making withdrawal the preferred method.
I recognize the benefits that annuities can offer for suitable individuals in appropriate scenarios, but I find them too inflexible. Since I don't plan on retiring abruptly and intend to keep working one or two days per week as long as my health allows, the ability to adjust income withdrawals according to my needs at any time will be essential.
Obviously, many things can and will inevitably change from this moment until I eventually retire.
Lisa Picardo, UK business chief at PensionBee, 46
I have spent the majority of my professional life in finance and currently manage the UK operations at PensionBee, so one might assume I have a firm grasp on my retirement savings.
However, similar to many individuals, I wasn't as involved as I might have been during the beginning of my professional journey, so I only made the minimum contributions to the workplace pension I was automatically signed up for, and then put it out of my mind.
Later on, there were periods when I didn't contribute to a pension at all—especially when I left a corporate job to start my own business and take care of my family. Retirement seemed distant, complicated, and pensions weren't a priority on my list of responsibilities.
That shifted when I became part of PensionBee. I witnessed firsthand how significant advancements could be achieved when individuals had access to the appropriate technology, support, resources, and information.
I began merging my previous workplace pensions into a single, convenient plan and started saving more actively. I now utilize the PensionBee app to monitor my fund, increase my contributions, and have gained confidence in choosing a plan that aligns with my values and financial objectives.
Since I am far from retirement, I have selected a strategy that is entirely focused on stocks to increase my savings over many years and then withdraw funds conveniently when the time arrives.
Although I anticipate receiving the full state pension, I am aware that it will not be sufficient by itself. This is why I now make regular contributions and discuss pensions openly with other investors. It's never too late to take charge of your retirement—small, steady steps can lead to significant changes over time.