All comfy in a local Pension?

04 September 2018

I saw a picture of an old boarding house recently, with painted advertising on its exterior, noting Hotel, accommodation and Pension. I was reminded of my childhood trips through France in decades gone by, where the word 'Pension' was common on local hostelries. Taking a quick glance at a European Dictionary, the definition of 'Pension' is very different from that of the UK, noting: 'a small hotel or boarding house in France and other European countries.'

If it is possible to link the two definitions, it makes me wonder if individuals are 'comfy in their pensions'? Do they even know until it's too late and the 'accommodation' they can afford in retirement is more 'nil' star than 'five' star.

Pensions in the UK, and to be clear I am referring to the savings type plan, need two things: money and time. I appreciate this comment might be relatively obvious, but both commodities are highly valuable, indeed possibly as valuable as each other. How much have you got of each to add to your savings for the longest holiday of your life, namely retirement?

Taking advice early in the process is valuable to ensure that you know what you are aiming for, if indeed you have a target. The way we all switch jobs, careers and income levels during a working life usually means that the days of the guaranteed, index linked two-thirds of final salary are long gone for most. So, what is your target, both in terms of pension income level and the age you want to achieve it?

In your circumstances, have you thought about:

  • Will you be debt free by the time you reach your chosen retirement age?
  • Will the children be as independent as they will ever get by then?
  • What sources will you use to create your retirement wealth? It doesn't have to be all from a specific pension pot.
  • What will the State Pension offer you and have you checked?
  • Have you shared and considered your plans with your partner? And do they share similar aspirations?
  • Where will you retire, and what do you want to do with your extra time?

This is just a short list of what you might want to consider in your planning. The possible list of questions could be a bit endless, but you get the idea of some of the parameters of what you might need to think about soon.

The team at Chapters Financial can help you with your pension and retirement planning. Please do get in contact with us in Guildford and, as you would anticipate, no individual advice is provided during the course of this blog.

Enjoy the stay in your pension, just decide soon how comfy you want the stay to be.

Keith Churchouse FPFS

Director, CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899