Research by Aviva surveyed 2,000 UK consumers in July 2011, including 988 over 50s. The research looked specifically at what advice the over 50s would give younger people about their finances.
According to the research, the top savings advice by 60% of the respondent retirees would be to spend less on expensive life events such as weddings in order to get ahead in later life. Not only this, but more than a quarter of those asked also advised the younger generation to have fewer children in order to be more financially secure in their retirement. Only one in ten of the retirees advised younger people to worry less in life about finance.
With the average cost of a wedding standing at £18,500, according to the ‘Weddings Day’ website, cutting this cost by half (or more) could provide the happy couple with a significant lump sum to start a pension fund and lay the foundations for future financial security together. The research findings also indicate that the happy couple would also be advised by 57% of the older respondents to shop around with every penny. The average unsecured debt paid annually by each UK household is estimated, on the Credit Action website, to be £2,467.
A further recommendation, from 45% of those responding, is to spend less on cars – according to the RAC Annual Cost of Motoring Index, a second car in the family costs an average of £5,869 to keep on the road each year. Another piece of fairly predictable advice, coming from just over half of those older customers surveyed, is to switch from buying designer labels, often costing twice as much as non-designer labelled items of clothing.
Even taking on board some of the advice, and saving a modest amount each month, could make a big difference to a young couple’s income in retirement. For example, a 30 year old male saving £150 a month on designer labels, cars and by shopping around and contributing this to a pension instead, could benefit according to Aviva calculations, by £450 income per month, from 65 throughout retirement, in addition to any state pension. His wife saving the same amount from 30 to 65 would enjoy £415 per month.
If you want to find out more, or need advice about saving for the future and pension planning, contact one of the team who will be happy to help.