Pension warning: They key to ensure ‘income lasts in retirement’ as inflation hits savers

Frozen pension: Pensioner says her situation is 'unfair'

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With life expectancy increasing, it is vital that people are saving enough to last over 30 years and their pots can withstand market volatility. Express.co.uk spoke exclusively with Paul Titterton, a retirement expert at abrdn. He suggested ways that Britons could plan to make sure they have enough money for retirement and people can maximise and protect their savings.

He said: “It’s critical that people plan to ensure that their income lasts throughout retirement – which could be more than 30 years depending on when you retire.

“First things first, you need to work out much you think you’ll need to spend each year. This can’t simply be a fixed amount for every year. 

“Your needs and circumstances will evolve as you move through your retirement and, as it does, how much money you need to spend will likely change too.

 “What this looks like in practice will be different for everyone, which is why speaking to a professional can be so valuable.”

He explained that seeking professional advice is a “key factor” in retirement planning. 

If people do not seek some advice or help, there may be things that they forget to think about which could be crucial in their later years and cause miscalculations for their funds.

“Speaking to a financial adviser, who has experienced of some of the costs that people might overlook, such as later-life care,” can make all the difference, he added.

Mr Titterton urged that Britons close to or recently retired should consider seeking financial advice to help better understand and review their income and spending.

Seeking guidance can also help make their income as tax efficient as possible.

He continued: “You’ll also need to factor in things like inflation – something that all of us will currently be more aware of than ever. 

“Making sure that your retirement savings can keep pace with inflation will help reduce the risk of you facing a ‘real-term’ loss in value in the future. 

“Put simply, if your savings aren’t growing at the same rate as inflation, each pound gradually buys less and less over time, meaning you may not be able to do as much as you’d planned with your money.”

He explained that having a  financial adviser can help to mitigate the impact of inflation and help people weigh up the types of savings and investment products that are available to them.

This could give someone’s money a chance at staying level with, or even outpacing inflation. 

These experts can also recommend options that align with someone’s retirement goals, and their appetite for risk.

Mr Titterton said: “A final element to keep in mind is tax.

“If you have a pension, you will be able to take up to 25 percent of this tax-free. 

“However, it’s essential to remember that the rest of your pension income will be subject to income tax.

“Additionally, you may need to pay capital gains tax on any shares or funds outside of your pension or ISAs.

“Planning the order in which you use your investments and savings can affect the tax you pay and a financial adviser can help you review your specific circumstances to ensure you’re not paying more than you have to, maximising the amount that you have available.

“Doing this can help alleviate worries and concerns and explore all the options you might have, to achieve your desired retirement.”

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