Investing for retirement is something that around 65% of Brits underestimate.
A new study conducted by Ipsos MORI on behalf of King’s College London has found that many of us are unaware of the true cost of living.
The cost of big life decisions such as going to university, raising a family and retiring are ‘hugely underestimated’ by Brits.
Of the 1,100 people surveyed, the average estimate of the debt a student would accumulate was £21,000 but in reality the debt is almost £44,000.
The cost of raising a family was also underestimated with the average cost estimated at £50,000 -the actual figure is £229,000.
What is alarming is the lack of understanding Brits have about investing for retirement.
The report shows that many of us are not saving for old age. Respondents believe that a £124,000 pension fund will provide a suitable retirement income of £25,000 per year. In reality, £300,000 would need to be saved to achieve an income of this level.
Bobby Duffy, managing director of Ipsos MORI Social Research Institute, commented that they get a huge number of things wrong about the finances – personal and national.
“It’s concerning that we think under-saving for pensions is a very widespread social norm, when that’s not really the case. This is important – we know that our perceptions of what normal behaviour is can be a strong effect on our own behaviour.
The things they get correct are the figures mostly sited in the news – interest rates or house prices. But the findings show underlying knowledge around these is very shaky. Unfortunately the historic level of interest rates is underestimate
The Importance of your Pension
Property expert, Jerald Solis from Experience Invest, believes that it is never too early for people start to saving and investing for retirement. Watch video…
New pension reforms – which came into effect in April 2015 – allow savers over the age of 55 to access their pension pot.
Tax restrictions apply however, many savers are now looking for way to top up their pension pot by reinvesting their money.
Property investment is one way for retirees to generate an income for their retirement.
Experience Invest has a wide range of income generating assets will provide investors with an assure income for a pre-determined period of time. Those investing for retirement may wish to speak to a property consultant to establish what type of income they could achieve through property investment.