Could you live on £140 a week?
Almost two out of three people (63%) think they could not live on £140 a week in retirement, rising to 72% for the 55 and over's, according to research from Standard Life. Only 17% of the 55 and over's think they could live on £140 a week. The Government has recently proposed a single-tier flat-rate state pension worth around £140 a week, and are currently consulting on how this might be introduced in 2015 at the earliest.
John Lawson, Head of Pensions Policy at Standard Life said: "The introduction of a state pension of £140 a week for all is to be welcomed. This makes it clear and easy for people to understand what they will receive from the government as a pension. However, people clearly recognise that £140 a week will not likely be enough to live on in retirement.
"We need to get more people to save more. This means encouraging people to take ownership of their financial futures by providing access to the right level of information, financial advice and products at the appropriate times."
The research also found there were significant differences of opinion between age groups, with the young more likely to think £140 a week was OK, while those in the older age ranges having had a reality check at the cost of living.
John Lawson concluded with tips for improving your financial health: "Sort out your basic finances. Make a budget each month. Check you are paying the lowest possible price for basic services such as utilities, car and home insurance. A few hours spent shopping around can save you hundreds of pounds a year.
"Set up a savings plan to put money away for your future needs. Pensions and ISAs are enough to meet the savings needs of 99% of the population. If you are saving for a retirement income, a pension is the most tax efficient home for your money. ISAs are a more flexible alternative that are good for shorter-term plans such as saving up for a house purchase deposit.
"Investing in cash, whilst generally safe, often means that your savings don't even keep pace with inflation, so don't be afraid to take some risk, particularly if you are investing for the longer-term. Savings providers now offer personalised investment portfolios, such as Standard Life's MyFolio, that match the level of risk you are comfortable with."
The Standard Life MyFolio funds are a family of funds carefully constructed to achieve growth whilst minimising risk. For further information, visit yourfuturemoney.co.uk.