Hobbies, holidays, time for family and friends ñ retirement should be golden. But with the state pension age rising and returns on private pensions falling, many of us may scrabble to make reality match our dreams.
Retirement can come at a price. One recent survey of 60-somethings found that the essentials, including a detached house, several holidays and socialising, would cost almost £11,000 per person, per year ñ thatís £225,000+ over an average 17 years of retirement . So make a wish-list of everything from food, home maintenance and transport to clothes, holidays, gifts, sport and hobbies. Remember that some items, such as energy bills, will rise when youíre spending more time at home.
Donít rely on the state
From April 2016, the state pension will be worth around £8,000 a year, providing youíve made 35 years of full National Insurance contributions ñ and only people currently in their 60s will be able to claim it before theyíre close to 70. Thatís a long wait for something that wonít meet your expectations.
Act your age
The Institute for Fiscal Studies reports that people born in the 1960s and after are likely to struggle even more than their predecessors, thanks to higher living standards, stagnating wages and the soaring cost of housing . Even if youíd be happy living frugally, at the age of 25 youíd need to save around £43 a month ñ and if you want to enjoy all the good life on an income of about £27,000, that figure rises to around £500. The older you are, the more you need to pour into your pension pot: at 45, the figures are £134 and £1,575 respectively. Every month .
Protect your credit status
More than a third of home owners now expect to be paying a mortgage until theyíre almost 70, while debt charity StepChange reports a surge in credit card, store card and catalogue debt among the over 60s. To help keep your credit status in the best possible shape as you approach your retirement, you can start by checking your Experian credit report to make sure all the details are correct. Pay particular attention to personal details, such as your name, address and date of birth, as even minor mistakes could lower your rating.
Retirement neednít be an issue as long as you continue to receive an income, you can afford to repay whatever you are applying for and your past borrowing record shows that youíre a reliable customer. You can get your Experian Credit Score and find advice on how to improve your credit status with a 30-day trial of CreditExpert.
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