Due to the consequences of the Covid pandemic, the energy crisis and a range of other factors, the UK and the wider global economy has seen inflation increase the cost of living substantially in a relatively short amount of time. This has resulted in much of the population having to cut back on their spending and reconsider their priorities when it comes to everyday purchases. This has meant that many have been preoccupied with immediate concerns that have arisen following the start of the cost of living crisis and have failed to consider how it might impact their retirement.
Research shows that for a single person living alone, the cost of a basic retirement has risen by 18%, now estimated at around £12,800 annually as opposed to the £10,900 needed before the cost increases.
The cost of energy and fuel makes up a large part of this increase, meaning that those who are hoping to retire in the coming months will probably need to reconsider their retirement plans or be forced to compromise on the quality of life they were hoping to maintain.
The government’s commitment to the pension triple lock means that there will be some increased support for pensioners, as the state pension is set to rise by 10.1% this year. However, this does not compensate for the 18% increase in the cost of retiring and there are also fears that this policy is ‘unsustainable’, as it will cost the government over £9 billion next year alone.
This article was kindly provided by Blacktower Financial Management Group and originally posted at: https://www.blacktowerfm.com/news/how-much-will-retirement-cost-you-after-inflation/
The above contents and comments are entirely the views and words of the author. FEIFA is not responsible for any action taken, or inaction, by anyone or any entity, because of reading this article. It is for guidance only and relevant professional advice should always be taken before investing in any assets or undertaking any financial planning.