According to Quilter without the benefit of a money advisor, over £300 billion in cash savings are sat in bank accounts that pay no interest at all.
But why? That main reason seems to be a lack of interest (literally!).
- Almost 40% of people say that they don’t talk to anyone about their finances, let alone a professional money advisor.
- 27% said that they “preferred” cash and didn’t like investing.
- 25% said that they might invest but had no confidence that they would do the right thing.
- 11% of people also kept a percentage of their cash at home hidden away.
- Only 33% of people in the UK have any form of investments.
Makes you wonder why Banks are allowed to provide accounts which pay no interest at all.
Perhaps the introduction of simplified advice will encourage more people to speak to an adviser. After all Lang cat found that there were over 8 million people holding at least £20,000 without an adviser to help them. That’s over £1.2 trillion in assets which could be invested.
Pension advisors also needed
Most money advisors are spending a lot of time calming clients down ahead of the upcoming budget. 90% report that clients have called with concerns about the pension reforms which are on the horizon. Alongside recurring concerns that the government will target tax free pension cash. These rumours have persisted since Labour came into power. Last year over 70% of people who took their tax-free cash over budget fears said that they regretted their actions. Most money advisors would tell clients to wait and see. Despite this, figures from the FCA showed that £91 billion was taken out of pensions for the first time last year. That’s up from £75 billion the year before and 70% up on 2022/23.
Of the withdrawals, over £20 billion was taken in tax free lump sums. Up 20% on the year before. The good news was that 30% of people making first time pension withdrawals spoke to a money advisor.
Other pension worries
The state pension triple lock is also a major concern. For pensioners over 65 with incomes of less than £25,000 a year, the state pension accounts for almost 60% of their income on average. Overall, it contributes 25% across all retirees.
People coming up to retirement are also concerned about the rules surrounding the increase in the Normal Minimum Pension Age (NMPA) which increases from 55 to 57 in April 2028. So far, HMRC have provided very little clarity about the transitional rules for the millions of people affected.
Beware fraud
As always please be aware of pension fraud. London Police reported almost 250 cases of pension fraud last year totalling over £7 million. Most were less than £10,000 but the highest was over £300,000.
The main scams involved impersonating the pension provider, romance scams sadly, and of course investment scams offering high returns. Please be on your guard.
How much in pension savings do you need to retire
The answer of course that it entirely depends on your individual circumstances. Which is why seeing a money advisor is the most important first step.
However, St James Place did some analysis which suggested that a £560,000 pension pot would be needed to support a comfortable lifestyle. Or a £60,000 net annual income. On the other hand First Wealth analysis suggested that between £570,000 and £740,000 would be required for someone retiring at 57 and looking for a comfortable living standard.
Currently the Retirement Living Standards say that £45,000 net income is enough for someone to live comfortably. (A single person that is).
Against this background however, DeVere found that 75% of people had never checked their pensions and weren’t even sure how many workplace pensions they had or who provided them.
Christina Clegg experience and expertise
Do you remember 1994? That was the year that Nelson Mandela became the President of South Africa. The Channel Tunnel was opened and OJ Simpson was arrested after the famous low speed police chase in LA. Tony Blair was elected as leader of the Labour Party and the film of the year was Four Weddings. Seems like a long time ago doesn’t it!
Well, 1994 was also the year that Christina qualified as a financial advisor working for the old National and Provincial Building Society, starting at the Parker Lane Head Office in Burnley.
32 years later Christina is still providing financial advice, pension advice and inheritance tax planning advice to hundreds of clients from her Barrowford Office.
Clients value Christina’s experience and expertise. There are very few local financial advisers with same level of experience. This shows through in her depth of understanding of the pension, investment and inheritance tax planning complexities. She has dealt with hundreds of pension schemes and estimates that she has helped over a thousand local families to achieve their long-term financial objectives.
So, if you value experience speak to Christina Clegg first.
Get more information.
If you would like to speak to a money advisor, then why not contact Christina today. We offer a free initial meeting to discuss your requirements and explain how our service works. You are under no obligation to use us after that if you don’t want to and we won’t pester you.
So why not call us today on 01282 614444 or e mail us enquiries@ccfps.co.uk or use our contact form online.
Or if you’d prefer to think about it some more, why not have a look at our Facebook page, our Vouched For page, or our Testimonials page to see what our customers think about us.
