Retirement planning needs to be taught in secondary schools and given the same priority as careers advice, according to de Vere Group’s chief executive Nigel Green, who says this is the only sustainable way to solve the pensions crisis.
His comments follow a study by Barings Asset Management that found 44% of those close to retirement age were unable to say when they would be able to retire.
It’s terrifying to think a large proportion of the population who are nearing retirement age do not know when they will be able to afford to retire. As a nation, it seems we’re ill-informed. In order to ensure people are, in the future, more likely to be able to retire when they choose (and not have to work on past their selected retirement age because they can’t afford to give up work), it’s of vital importance we teach from a young age – how to plan finances.
The earlier people start to make informed decisions, the easier it is to enjoy the lifestyle you deserve when you retire. Many are disillusioned with retirement planning and especially pensions but the truth is more likely – people are dissatisfied with the investment returns generated – this is where professional financial advice is paramount (but make sure the person giving the advice has the ability and enthusiasm to provide suitable advice both now and in the future).
In a poll back in April, more than 80% of users said their pension pot had failed to grow in-line with promises and projections made when they first began contributing (information provided by Barings Asset Management). Unless students are informed about the massive risks of ignoring retirement planning, many could find themselves worse off in later life.
Annuity Rates are at historic lows, age-related benefits is being scrapped, soaring living costs and taxes, and people living longer – meaning money has to go further – it’s clear that the world has changed irrevocably in the last few years; things are not the same today as they were a generation ago. Should we fail to plan for retirement, an increasing number could find themselves unable to enjoy the retirement that previous generations have taken for granted.
In secondary schools, students are taught about finding a suitable career, which is right and proper, but it is madness that we stop without equipping them with the life skills of how they are more likely to be financially independent once they are ready to leave the world of work.
Personally, I am a great believer in both pensions and alternative investment vehicles, such as ISAs, certain structured products/deposits, simple fixed term deposits and collective investments. I have been and will carry on saving through these investments and as an IFA (Independent Financial Adviser) specialising in investments and tax planning – I know that if I do not provide for my future – no one else will. I plan that we will have the retirement we deserve and yes, I expect and have planned to financially assist our daughters through their path to adulthood.
