Edinburgh heading for a '˜pension time bomb' warns experts
Edinburgh is facing a pension time bomb, with 100,000 people in the capital potentially facing retirement shortfall, writes Jamie Anderson of the financial website Edinburgh IFA.
It’s a problem that’s not going away - if anything, it’s getting worse.
Thanks to improvements in technology and medicine, we are all expected to live longer.
Only around 7% of people aged between 55 and 64 believe they will live to see 90 years old, but research shows it’s more likely that half of them will hit 90.
It’s great news - until you think about the implications for funding your retirement.
A study in late 2017 by the Financial Conduct Authority suggested many of us will be working well in to our 70s, 80s, and even beyond.
Based on those figures, Edinburgh IFA estimates that around 100,000 people working in Edinburgh have got no pension provisions in place whatsoever.
That’s roughly a third of the entire workforce.
While the age that you can start drawing your state pension is now 65 years old for both men and women, that becomes 67 years old for both by 2028.
Edinburgh IFA advises than rather than wallow in doom, you investigate the following options:
Workplace pension
If you’re in full-time employment, aged over 22 and earn over £10,000 per year, you’ll be automatically enrolled in to the workplace pension scheme by your employer. For as long as you continue working, both you and your employer will make contributions to your workplace pension fund. As the law stands, you could get access to this type of pension as early as age 55.
Self-invested personal pension (SIPP)
Better known as SIPP, this is another great way to boost your pension fund, and you can also get access aged 55. The advantage of a SIPP is that you can select the exact type of investment fund you want your money to be put to work with. It often pays to use an independent financial adviser to explain exactly how it all works.
Get advice
A combined study by Old Mutual and YouGov showed people who actively plan for their retirement on average make an additional £157,500 extra in their retirement compared to those who did not. The same study showed retirees who sought the services of a financial adviser benefitted from an additional £7000 per year in retirement on average compared to those who sought no advice.
Edinburgh IFA are leading financial advisers in Scotland, and they are offering Edinburgh Evening News readers a free consultation with one of their FCA regulated, impartial, independent financial advisers.
To get your free consultation, simply call them on 0131 564 1940 or fill out the quick contact form at www.edinburgh-ifa.co.uk