How to Maximise your Retirement Savings

23-Nov-2009

Many people aged 55 and above feel that the recession has diminished their retirement savings, according to an online survey carried out by UK insurer Aviva.  The survey showed that there is a huge amount of anxiety among those approaching retirement age, with 26% of the 1,200 respondents saying that 'making ends meet' is their main concern for the future.

When asked to specify what was worrying the respondents the most, 32% stated that the rising cost of living was the thing that kept them awake at night. 19% worried about their pension pot being smaller than they had originally expected, and 22% were mainly concerned about the value of their savings falling.   Despite the fact that all of the people surveyed by Aviva were within the last 10 years of their working lives, as many as 12% of respondents claim to have started investigating additional sources of income.

Brian Bussell, director of pensions, UK Life, Aviva, comments: "These latest figures highlight just how important it is for people to start saving for retirement as early as they can. Understandably, the recession has forced people to think about their retirement income and many have realised that they may not have sufficient funds to live through their final years in the comfort they have grown accustomed to."

"We would encourage people to make use of their full range of assets, including investments, state benefits, pensions and property, to make sure that they aren't effectively cheating themselves out of the lifestyle they could enjoy. We would also urge people to begin saving as early as possible for their retirement to make sure they do not have to make major lifestyle changes later in life."

But starting to prepare as early as possible is great advice for those at the start of their careers, but what are your options if you are approaching retirement and have concerns about your means?  The first step would be to check whether you are entitled to any additional State benefits that you are not currently aware of.  You can find out more about the benefits that may be available to you on the DirectGov website here. Also consider tracing any pensions that you may have lost track of, using the Pension Tracing Service.

Aviva recommends that you should take stock of all your assets including investments, state benefits, pensions and property", commenting that, "Many older people are asset-rich but cash-poor, so down-sizing or equity release may be an option for retirees in this position. However, if you are considering equity release or property we would strongly advise you discuss this with your family before making any commitments."  To find out more about the different types of equity release programme available, please click on the link.

Another way of making your retirement savings go further is to utilise your Open Market Option (OMO) when buying an annuity with your pension savings.  The OMO is simply the process of shopping around for the best deal on annuities, rather than simply choosing the one offered by your pension provider.   Although some pension plans have restricting on this, in most cases you are free to choose any annuity you wish.  When you consider that choosing the right annuity for your circumstances can significantly increase your retirement income, it is definitely worth taking the time to shop around.  If you want to find out more about your retirement planning options, you can find an independent financial adviser in your local area at www.unbiased.co.uk.