According to research by Canada Life made available earlier this year, around £22,500 is the ideal retirement income. However, state pension only accounts for £9627 p.a. for those that reached state pension age after 6 April 2016, or £7376 p.a. if you reached state pension age before that. (The rates may vary depending on circumstances.
This does mean that nearly £13000 p.a. needs to come from other sources. This could be from savings (at 0.5% you would need £260,000 invested), property income, or from a private pension.
Far too many people assume their business will provide their pension-selling it to retire. However, if family members are involved and they wish to continue the business this is a conundrum, and many businesses do unfortunately fail. By making pension contributions, either personally or from the company, this does build up a nest egg outside of the business and will help fund that desired income on retirement.
It is never too early to think pensions and income in retirement. Please contact us now and speak with us about your retirement plans and savings!
