Your Savings: How to Assess Your Savings, Plan Ahead and Budget (Express Newspapers Non Retirement Guides)

129 Pages·2009·0.46 MB·English

by  Frances Kay

your savings aw:Layout 1 26/5/09 11:10 Page 1
non-retirement guides
Money is the main concern for most people approaching retirement as
their income is likely to have to last for a long time and keep up with
inflation.
your
savings
Your Savingswill help you to prepare for retirement or, if you have
already retired, it will show you how to make the best of what you
have, drawing your attention to some of the provisions that could have
a bearing on your immediate or long-term plans. It covers:
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(cid:129) expected sources of income (cid:129) personal pensions for
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on retirement; employees;
(cid:129) unavoidable outgoings; (cid:129) types of investment policy; R
(cid:129) money left unclaimed; (cid:129) part-time employment;
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(cid:129) extra income; (cid:129) pensions for women;
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(cid:129) state pensions; (cid:129) reduced-rate contribution;
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(cid:129) private pensions; (cid:129) home responsibilities
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(cid:129) company pension schemes; protection. How to assess
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By spelling out the facts in clear, accessible language, Your Savingswill S
your savings,
help you to make your money work for you so that you will get the
most out of your retirement.
plan ahead
Frances Kayconsults and advises on all aspects of business, career and
personal development. An experienced researcher, editor and author, and budget
she has written a number of successful business books including F
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Understanding NLPand is the editor of The Good Non Retirement a
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Guide(also published by Kogan Page).
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£5.99 y
ISBN: 978-0-7494-5588-0
Kogan Page
120 Pentonville Road
London N1 9JN
9 780749 455880
United Kingdom
Frances Kay
www.koganpage.com Retirement Edited by
your
savings

Publisher’s note
Every possible effort has been made to ensure that the information contained
in this book is accurate at the time of going to press, and the publishers and
the author cannot accept responsibility for any errors or omissions, however
caused. No responsibility for loss or damage occasioned to any person acting,
or refraining from action, as a result of the material in this publication can be
accepted by the editor, the publisher or the author.
First published in Great Britain in 2009 by Kogan Page Limited
Apart from any fair dealing for the purposes of research or private study, or
criticism or review, as permitted under the Copyright, Designs and Patents
Act 1988, this publication may only be reproduced, stored or transmitted, in
any form or by any means, with the prior permission in writing of the
publishers, or in the case of reprographic reproduction in accordance with
the terms and licences issued by the CLA. Enquiries concerning reproduction
outside these terms should be sent to the publishers at the undermentioned
address:
Kogan Page Limited
120 Pentonville Road
London N1 9JN
United Kingdom
www.koganpage.com
© Kogan Page, 2009
The right of Kogan Page to be identified as the author of this work has been
asserted by them in accordance with the Copyright, Designs and Patents Act
1988.
British Library Cataloguing in Publication Data
A CIP record for this book is available from the British Library.
ISBN 978 0 7494 5588 0
Typeset by Jean Cussons Typesetting, Diss, Norfolk
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Contents
Introduction 1
1 Doing the sums 3
Possible savings 5
Extra outgoings 6
Expected sources of income on retirement 7
Unavoidable outgoings 9
Normal additional expenditure 10
Spending now for saving later 11
If you become redundant 14
Money left unclaimed 17
Extra income 18
2 Budget planner 21
Possible savings when you retire 22
Possible extra outgoings when you retire 24
■
vi Contents
Expected sources of income on retirement 25
Unavoidable outgoings 28
Normal additional expenditure 29
3 Pensions 31
State pensions 31
Private pensions 49
Company pension schemes 50
Personal pensions for employees 71
Stakeholder pensions 78
Types of investment policy 80
Opting back into the State scheme 83
A lump sum? 84
Pension rights if you continue to work after 85
retirement age
Equal pension age 87
Divorce 87
Divorced wives 88
Separated wives 89
Widows 90
Part-timers 93
Pensions for women 94
Reduced-rate contribution 95
Home Responsibilities Protection 96
Graduated pension 98
Additional pension 98
Stop Press 101
Pension funds 101
Help for pensioners 101
Summary 103
Introduction
If you are to get the best that life has to offer after retire-
ment, it pays to make some effort in advance. Important
events always require some preparation if we are to make
the most of them. This book gives general advice to help you
to sort out some of the practicalities involved. Its aim as a
resource is to help you enjoy your retirement to the full.
The majority of people retiring today are fitter, more skilled
and financially better off than previous generations. Also,
thanks to improved lifestyles and medical advances, a great
many of us can realistically look forward to 25 years or
more of active life – 60 could be the new 30. As a result,
planning for the future has become critically important. Key
concerns are most likely to be money and what to do with
your time. Other issues may well include where you live,
how to keep healthy and how your retirement affects your
■
2 Your savings
nearest and dearest. This book shows what is possible,
advises on the best sources of relevant information available
and helps you avoid the pitfalls that can catch the unwary.
If you were to conduct a survey asking people approaching
retirement what their major concern was, most people
would say ‘having enough money’. For some there may be
no worries; they have planned the event for years, made
maximum pension contributions, carefully invested their
savings, covered themselves and their family in insurance
policies and carefully worked out forecasting budgets. They
may even have a ‘to do list’ of what they are going to spend
their money on as soon as their new life begins.
For a large number of people, however, this is not the case.
After years of giving minimal thought to their pension, they
are overcome with anxiety and fear as they realise that soon
they will no longer be drawing a regular salary. Despite
having friends who are already retired and who seem to live
perfectly well, they worry about not having enough to live
on. Even quite wealthy individuals confess to conjuring up
images of being cold and hungry. In most cases anticipation
is far worse than reality. Retirement can be far rosier than
many people imagine. As long as people are realistic, it is
unlikely that drastic economies will have to be made. For
many men and women who have only a rough idea as to
their likely income and expenditure, the future may not be
bleak at all. This book shows what is possible, advises on
the best sources of relevant information available and helps
you avoid the pitfalls that can catch the unwary.
1
Doing the sums
Those who profess total ignorance of their financial situ-
ation have no excuse. It is far more sensible to be a wise owl
than a headless chicken. Doing some preparation, knowing
the facts and figures, is the essential first step in your pre-
retirement planning. To make a proper assessment, you need
to draw up several lists:
■ expected sources of income on retirement;
■ essential outgoings;
■ normal additional spending (such as holidays and other
luxuries).
Second, have a think about these options under the follow-
ing headings: