Robert Gardner, co-CEO of Redington, wrote this piece for Morningstar.co.uk. However, the advice is universal.
The best time to save for a pension is 30 years ago; the second best is now.
Twenty years from now, you will wish you had started saving 15% of what you earned to feel confident enough of controlling of your financial future.
We are responsible for saving and investing for our own financial security, with the freedom of choice over our savings in retirement. However, we are all living longer than the retirement age is rising. This means we spend longer in retirement and require more money. We are also responsible for beating inflation, investment and longevity risks.
In this new Age of Responsibility we need a Roadmap to save for a comfortable retirement. We believe people need to save early, save often, save more, save longer.
Shift your mindset
Openly discuss planning, saving and investing for retirement with those around you. If we can collectively influence one another to save more and save better, we will grow wealthier as a nation.
Seek advice
Those who have been advised on their retirement planning save a third more – and retire with double the pension savings.
Have an end in mind
Begin your saving journey with a clear retirement objective, and invest accordingly.
Do not wait until tomorrow
People in the UK currently save 5-6% of their income, when in fact you need at least 15% to live comfortably in retirement. Consistently saving at this level will yield extraordinary results.
Save more, spend less
Remember that your savings – not your income – will determine your financial freedom. Budgeting and saving to pay down debts is important. Even those who save tend to do so with a large item or house deposit in mind; fewer than one in five are saving for retirement.
Invest according to your own retirement goals
Frame your investment decisions and risks in the context of the income you need in retirement. There is an ever-increasing number of investment products designed to help you reach your personal objectives.
Stay on track
Use technology to stay on track with your savings and investments on the journey to retirement. Monitoring your progress may also combat behavioural biases of inertia and short term gratification.
Don't be afraid to start saving 15% today. Your future self will thank you enormously.
