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Best way to save for retirement

Facing the fact that you have to stop work at some time is hard for some people while for others the day just can’t come soon enough. Whether you’re in the first or second camp, you will need to have a retirement plan, although that doesn’t have to be a pension. The best way to save for retirement remains a pension but you should also consider these ideas.
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Retirement planning

Stats from Standard Life show that workers in their 20s only need to put away £149 a month to have a £10,000 per year pension when they hit 68 years old. Workers who wait until they reach their 40s have to put away twice as much per month to get the same amount out. If you haven’t begun a pension plan and you’re over 40, you might want to consider ways to accelerate your savings.

ISAs

Cash ISAs are a great way of squirrelling money away for your golden years as they don’t charge tax on the interest earned. There’s an annual limit on the amount that’s not taxed but it’s a pretty high threshold for most savers. Savers in the 40% tax bracket will see the biggest benefits but it’s also really worthwhile for those who contribute 20% tax.

NS&I

The NS&I offer taxable and tax-efficient savings options that can be used to increase a retirement fund. The Pensioner Bond is another product that can help but it’s aimed at those who have already retired and are looking for a fixed rate savings account.

Final word

Your other option is to downsize your property and keep the residual equity in a high interest saving account. This is something that provides a lot of pensioners with long term income but it relies on you having bought your house outright in order to have a meaningful impact on your retirement income.

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