Retirement Calculator Page

Prepare for your retirement

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Independent Financial Adviser, Carl Hasty, outlines how you can prepare for your retirement including locating lost pensions, considering other income sources and calculating how much you anticipate spending in retirement by using our handy retirement calculator.

To discuss more about your retirement options or to find out more about our retirement planning services, please get in touch.

Retirement Savings Gap

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Four in five workers (16 million people) are not saving at levels which are likely to deliver an acceptable standard of living in retirement, according to research[1] – these numbers exclude Defined Benefit pension savings.

The key reason behind this low confidence is the inability to afford savings on an ongoing basis, followed by worry about paying off existing debts.

Future crisis

Low-paid workers are least likely to be saving at these levels, with fewer than 5% saving at a rate which would provide an adequate standard of living in retirement. Low savings levels are a long-standing issue; however, the cost-of-living crisis is exacerbating the problem.

The UK’s lowest-paid workers have been hardest impacted during the crisis, often struggling to make ends meet. As a result, many are unable to prioritise saving for retirement, and today’s cost-of-living crisis risks storing up a future crisis where millions are unable to afford even the basics in retirement.

Saving behaviour

Just as low pay has impacted female workers most, the gender pensions gap remains an issue. The report found that 23% of male workers met the ‘whole career’ Living Pension cash benchmark, compared to 15% of female workers, and that this is driven principally by differing levels of pay rather than differing saving behaviour.

The Living Pension benchmarks are based on a previous feasibility study by the Resolution Foundation, which proposed a ‘whole career’ benchmark of 11.2% of pay, or £2,100 per year for someone working full-time at the living wage.

Huge variations

The report also highlighted that there are huge variations in whether workers are meeting the Living Pension benchmarks by sector. 55% of workers in the finance industry save at or above the ‘whole career’ cash LP benchmark, compared to only 2% of workers in hospitality.

These differences persist even if they account for variations between sectors in workers’ pay levels, occupation and whether they are full-time. This suggests that sector differences in pension saving are driven either by employers’ behaviour or their approach to the overall renumeration package.

What if I could have the retirement I really want?

Planning so that you can enjoy today, whilst making sure there is plenty saved for the future, can be a tricky balance to get right. If you would like advice and support with retirement planning, please get in touch.

Source data: [1] https://www.livingwage.org.uk/sites/default/files/Living%20Pensions%20Report.pdf

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless plan has a protected pension age).  The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.  Your pension income could also be affected by the interest rates at the time you take your benefits.

Asset Allocation

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What is asset allocation and diversification?

Asset allocation involves diversifying your investments among different assets, such as equities, bonds, property and cash. Asset allocation may change depending on what works for you based on your financial goals and your ability to tolerate risk.

  • Cash: Cash equivalents and other forms of money can be easily accessed at any time.
  • Equities: Purchasing shares on the stock market, typically traded on the Stock Exchange.
  • Bonds: A fixed-income product representing a loan made by an investor, typically corporate or governmental, for a fixed period.
  • Property: Buying properties intending to make money e.g. rental income or selling a property.

When building our portfolios, we consider all the economic and technical market conditions that influence our exposures to the main asset classes of Ellis equities, bonds, property and cash.

We screen and choose all our funds, not just our Socially Responsible Investment portfolios, against a range of Environmental, Social and Governance (ESG) factors so you can see the impact your investments are having.

Read more on our screening process for sustainable investment funds.

Retiring Early

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Retiring early can give you that change of lifestyle you’ve been craving, but requires some careful planning. Financial Adviser, Andy King, discusses how he helped a client by discovering that they could retire early.

If you are unsure whether you can retire early, use our handy retirement age calculator to see how much you may need to save.

Worried about generating a retirement income?

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Worried about generating a retirement income? More over-50s returning to work amid cost of living crisis.

Older workers have been leaving the jobs market in their droves over the past two years, partly due to many re-evaluating what they want from their lives and careers during the course of the COVID-19 pandemic, and also due to the devastating impact the pandemic had on the prospects for many older jobseekers, who felt they had no choice but to leave the workforce.

But the cost-of-living crisis is now affecting some pensioners drastically, with more older people starting to return to work amid the ongoing crisis, new research has highlighted[1]. The findings identified economic activity levels among the over-50s are now at their highest since the pandemic began.

Impacting pensions

Analysis of official statistics appears to show the first signs of a return to the long-term trend of more economically active people over the age of 50 – a decades-long trend which, it said, was reversed by the pandemic.

Spiralling inflation and turbulent financial markets impacting pension funds are causing some people to unretire and find work again. There has been an increase in economic activity (those in work or looking for work) of 116,000 among the over-50s in the past year. More than half of the increase is being driven by men over the age of 65.

Retiring comfortably

In some ways, the pandemic forced the hands of many and gave them an opportunity to trial retirement. An early retirement can often seem like a dream when you’re stuck in the thick of the daily grind but, for many, giving up work abruptly can also result in a loss of structure, social connections and purpose, which can leave people feeling lost at times.

The current economic climate means that some people who thought they could retire comfortably during the pandemic are now having to unretire and find work again to bring in some extra income and top up their pensions while they still can.

Want to discuss how to make your money work for you?

If you’re getting ready to retire, or maybe you’ve already retired, now may be a good time to think about professional financial advice. It can take some of the worries out of retirement planning and ensure your money will go further. So if you have any concerns about your retirement, we can help make your money work for you. To talk to us, please contact us – we look forward to hearing from you.

Source data: [1] Analysis by www.restless.co.uk – Economic activity levels amongst people over the age of 50 hit their peak of just over 11 million just before the pandemic in the three-month period from December 2019 – February 2020. Since then, we have seen a decades-long trend reverse, with economic activity levels of workers aged over 50 falling by as much as 223,000 during the pandemic.

Is your money working hard for you?

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Are you feeling uncertain on the way forward to your retirement?

We offer a range of retirement planning services, including a handy retirement calculator to see how much you need to save for retirement. Alternatively, find out more about how our cashflow modelling service can help you visualise your expenditure, income and preferred lifestyle in retirement.

Early Retirement

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Regional Manager and Financial Planner, Dax Bayley, shares how he enhanced someone’s life by using cashflow modelling to help them to retire earlier than they had planned.

Steps to Retirement

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Step One: think ahead to the type of retirement you want

The first step is always to have an idea of what you want to do when you eventually stop work. It is helpful to have a good idea of the lifestyle you want, how much it will cost and how you are going to pay for it. You may want to travel, spend more time with family and friends, pursue hobbies and interests or move house. However you see your retirement, itis important to think ahead, plan ahead and cost up how much this may cost so you put a savings/investing plan in place.

Step Two: plan to cover your costs

You will need to make sure that you have enough saved up to cover your basic costs including living expenses and any debts or financial obligations you may have. You will need to look at your current savings levels, investments, pensions etc and map them all out to see what you already have/expect to have and then to put additional savings/pension contributions plans in place. Once this is done you will have a better idea of how much you will need to retire. At Ellis Bates we use sophisticated cashflow to map out your income and expenditure and map these against your retirement goals to bring your retirement journey to life. Hop over to  https://www.ellisbates.com/retirement-calculator/to add in some overview numbers to get an idea of how much you will need to retire.

Step Three: be enthusiastic

Retirement planning is complex but the more enthusiastic you are about retiring, the more likely you are to develop a robust retirement plan and retire at the age you want to and with the lifestyle you want.

Step Four: factor in inflation

The cost of living will go up as we are seeing currently, so you’ll need to make sure that your savings and investments including your pensions not only keep can keep pace with inflation but keep ahead if possible so that your buying power is not eroded.

Step Five: seek impartial advice

External advice compensates for any emotional biases you may have about making big financial decisions. A DIY approach to managing large pension funds at retirement is fraught with risk. People can easily buy the wrong products, incur unnecessary tax bills or simply exhaust their retirement funds too quickly, whereas an adviser will provide an impartial, cool-headed approach to your finances and offer solutions you will not have considered. Obtaining expert professional financial advice will ensure you are on track to meeting your goals. The sooner you start planning, the more likely you are to achieve a comfortable retirement, at an age you choose. We can help you calculate how much you need to retire, simply book a free consultation.

a couple walking hand in hand on a beach after saving a retirement nest egg for retirement

Retirement nest egg

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a couple walking hand in hand on a beach after saving a retirement nest egg for retirementNearly a half of over-50s regret not saving into their pension earlier

The days of working for a single employer for your entire career and retiring with a comfortable pension are largely gone. The responsibility for accumulating a retirement nest egg now rests with individuals as opposed to their employers.

Saving enough for retirement is challenging for many people, but an era of changing demographic trends, such as increased longevity and delayed marriage, can make this journey even more difficult.

Not financially stable enough to contribute

New research[1] into the attitudes of the over-50s towards their pension has uncovered that nearly a half (49%) regret not saving into their pension earlier, and almost two-thirds (64%) wish they had contributed more into their retirement savings at an earlier stage.

Just over a quarter (26%) stated that they only started paying into their pension after they turned 30 years old, primarily because they did not feel financially stable enough to contribute any sooner (51%). Many, understandably, prioritised raising children (42%) and paying o” their mortgages (40%) before putting any surplus cash into their pension. However, a third put leisure/holidays (32%), clothing (21%) and their pets (10%) before their retirement income.

‘Moderate’ standard of living in retirement

Almost four in ten (39%) people over the age of 50 believe that an income of between £10,000 and £20,000 per annum in retirement will be enough to live ‘comfortably’. This is despite figures announced stating that £20,800 per annum will only provide an individual with a ‘moderate’ standard of living in retirement. To enjoy a ‘comfortable’ standard of living, the amount would need to increase to £33,600 per year.

Just under a quarter (24%) of those aged over 50 believe that a personal contribution of between 0% to 5% of their salary is an ‘appropriate and achievable’ level to attain a savings pot big enough to support them in retirement.

Taking professional financial advice is key

When asked about financial advice, worryingly more than 70% of over-50s say they have never sought professional financial advice regarding their pension. Almost a third (30%) say they feel they know what they are doing and don’t need financial support, whilst 10% say they rely on their family and friends for support and advice. However, after hearing that they could add as much as £47,000 to their pension[2] (over a decade) by taking professional financial advice, half of them say they would.

Pensions are more important to more of us than ever before. Automatic enrolment has brought pension savings to millions, but this was only introduced in 2012 and for many, especially those over the age of 50, it is perhaps too little, too late.

Take stock of your financial situation early

Hindsight is a wonderful thing and life in your 20s and 30s can often take over, with children to raise, debts to pay and holidays to be had. However, it’s important to take stock of your financial situation early. You may think you have enough spare cash, or that you have years until you retire, but most people over the age of fifty (64%) wished that they had paid more into their pension pot, earlier.

It’s also important that people are realistic about how much they might need to live on in retirement. With more people continuing to pay rent or mortgages after they finish working[3], it is unlikely that an income of between £10,000 and £20,000 per year will be sufficient to have a ‘comfortable’ lifestyle.

Planning for a full and happy retirement?

To avoid sleepwalking into retirement it’s important to understand how much you have in your pension, what that money might look like as retirement income and how long you might need that money to last. For advice on all your options, including your retirement nest egg, please contact us.

Source data: 1,034 UK adults over the age of 50 (retired and nonretired) interviewed between 31.01.2022-07.02.2022
[1] https://www.retirementlivingstandards.org.uk/news/retirement-living-standards-updated-to-reflect
[2] https://ilcuk.org.uk/”inancial-advice-provides-47k-wealth-uplift-in-decade/
[3] https://www.bbc.co.uk/news/business-42193251

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future. You should seek advice to under your options at retirement.

Staggered Retirement

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A more popular and increasingly common option many are considering.

Giving up the 9-to-5 doesn’t necessarily mean stopping work. But retirement planning has taken on an entirely new dimension as a result of the COVID-19 pandemic outbreak with many big questions being asked. When you picture yourself in your golden years, are you sitting on a beach, hitting the golf course, or still working behind a desk? For many people of retirement age, continuing to work is an option they are considering. Increasingly people are planning to stagger work or work flexibly. This can really appeal to some individuals who have caring responsibilities or health issues, or who are thinking about retiring in the next few years. 

Sudden transition from working five days a week

Several decades ago, working and retirement were binary terms, with little overlap. People were either working (and under the age of 65) or had hit the age of 65 and were retired. That’s no longer true, however, as staggered retirement is becoming more popular and more common.

Few people benefit from the sudden transition from working five days a week to not working at all. Retirement can often be an unsettling period and it’s not surprising given that the most common path into retirement is to go ‘cold turkey’ and simply stop working. 

More flexible retirement and working part-time

New research has highlighted the fact that fewer people are deciding against completely stopping working and are opting for a staggered and more flexible retirement and working part-time[1]. Nearly one in three (32%) pensioners in their 60s and 16% of over70s have left their pensions untouched. And of those who haven’t accessed their pension pot, nearly half (48%) of those in their 60s, and 24% of over-70s, say it is because they are still working. With people living longer, and the added prospect of health care costs in laterlife, retirees increasingly  understand the benefits of having a larger pension pot in later life.

Pensions are required to last as long as possible

Of those who haven’t accessed their pension pot, half (51%) say it is because they are still working while more than a quarter (25%) of people in their 60s say it is because they want their pensions to last as long as possible. Of course, retirees who haven’t accessed their pension pot must have alternative sources of income. When asked about their income, nearly half said they take an income from cash savings (47%), others rely on their spouse or partner’s income (35%) or State Pension (22%) while 12% rely on income from property investments added prospect of health care costs in laterlife, retirees increasingly understand the benefits of having a larger pension pot in later life. 

Offering people different financial and health benefits

This trend for staggered retirements offers many financial and health benefits. It is often taken for granted but continued good health is one of the best financial assets people can have. The benefits of working – such as remaining physically active and continued social interaction – can make a big difference to people’s mental wellbeing and overall health in retirement. People are increasingly making alternative choices about retirement to ensure that they do not run out of money, but it’s also really important to make pension savings work past retirement age so as not to miss out on the ability to generate growth above inflation for when there is the requirement to start drawing a pension. 

Worried about retirement uncertainty?

Planning your financial future is one of the most important things you can do in your life. Do you require professional advice and help with your retirement planning during this difficult time? Speak to us to find out how we can help you.