June 7, 2023
Most of us are familiar with the idea of planning and goal-setting in order to achieve our aims – whether in life or at work. Financial goals are no exception. Financial planning is a crucial step towards achieving financial freedom and security. By taking the time to thoroughly evaluate your personal goals and requirements, you’ll be able to make informed decisions about how best to allocate your resources.
Making a comprehensive professional financial plan will give you the confidence and peace of mind to pursue your short-term goals whilst also working towards your long-term future.
With professional guidance from a qualified financial adviser, you might also be inspired to discover that you have more resources at your disposal than you imagined, and that you could afford to retire earlier.
According to a recent study on behalf of Standard Life, UK consumers who receive professional financial advice can expect to retire on average three years earlier than those who don’t seek professional advice, with advised consumers planning for retirement at age 66 as opposed to non-advised consumers who expect to retire at 69.[1].
They can also expect to fund their retirement for a longer period, with an average of 23 years before pertinent cutbacks must be made for people who have been professionally advised, compared to 17 years for non-advised people.
This highlights some of the positive impact and value that professional financial advice can have on your retirement preparations.
The study also identified that seeking financial advice makes it significantly more likely that you’ll create a detailed spending plan in retirement. 45% of people who seek advice create a financial plan, compared with 18% of those who don’t take advice.
The study also reveals that financial planning tends to be beneficial for people who have already retired.
Almost all (96%) of wealthy retirees who either did a great deal or a little financial planning say they’re enjoying their retirement, dropping to 72% among those who did no financial planning.
Many non-advised retirees admit that they require more money in retirement compared with their original estimates, and say that they wished they had planned more thoroughly.
Even among those with a higher household income (between £40,000 and £49,999), 23% of wealthier pensioners say that they wish they had planned more thoroughly.
Planning for retirement can feel overwhelming, as there are so many factors to consider. The study reveals that 72% of people do little, if any, retirement planning. Partly, this is because they feel overwhelmed by information, which prevents them from filling the gaps in their pension knowledge.
Speaking to an independent financial adviser has been shown to give people more confidence when it comes to making key decisions about how much to pay into their pension, and how much/when to take a cash lump sum or regular income.
This makes it crucial that you seek expert advice that you can trust – speaking to a qualified adviser who has your best interests at heart.
With the current cost-of-living, inflation and interest levels, it’s worth reviewing whether your plans for your finances in retirement are keeping track. You may be happy that your retirement funds are sufficient to support the lifestyle you’re planning for in retirement. But one thing to consider, rather than the ‘cost of living’ might be ‘cost of finance’. That is to say, if your retirement plans include spending substantial sums on a new property in the UK or abroad, major home improvement projects or significant purchases, are you confident that you have access to the sums you need without depleting your pension pot too much? We’ve become used in recent years to easy availability of affordable finance – with interest rates reverting to more (historically) normal levels on top of cost-of-living increases, even wealthy retirees are finding themselves questioning whether their plans are financially viable.
At Talis IFA, we understand that life comes before money. We take a ‘life first, money second’ approach, so our recommendations are based on developing a deep understanding of your current situation and future plans – whether that’s saving for the future, freeing up money to live your retirement plans or helping out your family.
Because we’re fully independent, we’re not tied to any particular pension provider or product, so our advice is always completely objective and focussed on what will work best for you. We might suggest options that will save you money in the long term – like consolidating pension pots, for example. But if we review your current finances and consider that they are in the best shape they can be, we’ll say so. We’ll never recommend changes that aren’t necessary.
Whatever your circumstances, we’ll review your current finances and retirement plans and provide expertise that will help you to make your money work for you, so you can approach your retirement with confidence.
To discuss your retirement plans, get in touch with one or our Talis Independent Financial Advisers.
Source data:
[1] Retirement Voice | Standard Life Boxclever conducted research for Standard Life among 6,000 UK adults. Fieldwork was conducted between 6 Sept–16 October 2022. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics. Comparisons to data from last year are taken from Boxclever research among 4,896 UK adults conducted between 16–23 July 2021.
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