It’s a fact THAT more of us will require specialist care in our later years

Today, the cost of care is a major concern for many people, with the average level of pension savings unlikely to be enough to cover any long-term care requirements in addition to providing a retirement income.

Why the consequences could be far-reaching for you and your loved ones

Significant changes to existing intestacy rules came into force on 1 October 2014 in England and Wales, with the aim of making things simpler and clearer. The consequences could be far-reaching for you and your loved ones, and while there are increasing entitlements for surviving spouses and registered civil partners, the changes highlight the importance of making a Will to ensure your wishes are carried out.

The numbers show a significant protection gap exists for families in the UK

W e all want to safeguard our family’s lifestyle in case the worst should happen. But only a quarter (24%) of adults in the UK with children under 16 have any form of financial protection, a significant drop from 31% in 2013, according to the latest research from the Scottish Widows Protection Report. With over half (54%) of this group admitting that their savings would last just a couple of months if they were unable to work, a significant protection gap exists for families in the UK.

The best chance of being reunited with a lost scheme

People change jobs and employers change their names, but, more importantly, we all forget things from time to time. With that in mind, it is easy to lose track of pensions that you have paid into over the years. If you do not actively look for your lost pensions, then you take the risk of relying on them looking for you! This can be difficult for them to do if, for example, you have changed your name through marriage or moved home yourself.

Bringing your pensions under one roof

Most people, during their career, accumulate a number of different pension plans. Keeping your pension savings in a number of different plans may result in lost investment opportunities and unnecessary exposure to risk.

However, not all consolidation of pensions will be in your best interests. You should always look carefully into the possible benefits and drawbacks and, if unsure, seek professional advice.

Taking control of your money

Some people don’t want a pension company deciding how their pension savings are invested – they want to control where their money goes and how it grows. In this scenario, a Self-Invested Personal Pension (SIPP) offers a solution. Very much a do-it-yourself pension, you choose what investments you want to put your savings into and keep control of your savings.

Saving for your retirement that’s arranged by your employer

Millions of workers are being automatically enrolled into a workplace pension by their employer. A workplace pension is a way of saving for your retirement that’s arranged by your employer.

A percentage of your pay is put into the pension scheme automatically every payday. In most cases, your employer and the Government also contribute money into the pension scheme for you. The money is used to pay you an income for the rest of your life when you start receiving the pension.

Why planning for your future retirement requires answers

We all look forward to stopping work, embarking on a new path and making the most of our new-found freedom. But with all the talk and concern about dwindling retirement funds and our shaky economy, many retirees and soon-to-be-retired boomers need to consider three very important questions, sooner rather than later.

Protecting your assets to give your family lasting benefits in an uncertain world

Inheritance Tax (IHT) in the UK is a subject that was once something that only affected very wealthy people. It may be one of life’s unpleasant facts but today it affects more people than ever, partly due to the rise in the property market that has not been matched by a corresponding rise in the IHT threshold.

What’s positive for one investment can be negative for another

Different types of investments are affected in different ways by factors such as economics, interest rates, politics, conflicts, even weather events. What’s positive for one investment can be negative for another, and when one rises another may fall. This interlinked movement between assets is known as ‘correlation’.

The financial pressure on parents providing board to their adult offspring

Parents with adult children living under their roof are spending £1,200* more than their Empty Nester counterparts each year on everyday household expenditure, bringing the total annual cost of ‘Full Nest Syndrome’ in the UK to £3.2 billion[1].

One in three could not carry out current jobs past their traditional retirement age

Employers estimate up to a third of their staff would struggle to continue in their current jobs past traditional retirement ages, research for MetLife Employee Benefits[1] shows. Its nationwide study found HR directors believe that, on average, 31% of their current workforce would not be able to perform their jobs adequately once they reach normal retirement ages, even though 54% of them expect an increase in the proportion of older staff.

Fewer people are putting money away despite improvements to the economy

The gap between the fortunes of savers and non-savers continues to widen, and research supports these findings[1]. ‘Habitual savers’ continue to put away more for a rainy day, but the total number of people saving has fallen, and, despite improvements to the economy, one in five people in the UK have no savings at all.

How new pension fund rules could increase life expectancy

With the news that the tax charge on pension funds will be removed before age 75, some commentators have suggested that over 90% of people retiring in good health should expect to live beyond age 75. For someone with moderate levels of health issues, over 80% might expect to live to at least 75. The tax landscape beyond age 75 is different, with tax being paid on monies passed on.

Filling in the family gaps

With an ageing population and increasingly more children living at home for longer, more and more people are joining the ‘Sandwich Generation’, having to fund family at both ends of the spectrum, such as their parents and children as well as themselves.

Pressure to keep earning
It is estimated that over a million Britons are now members of the Sandwich Generation and the pressure is on them to keep earning, in order to fund the care and lifestyles of loved ones. The main areas of financial support the Sandwich Generation find themselves paying for includes: food and household bills (54%), paying off debts (54%), home renovations (23%), medical care (32%) and education fees (11%).

What’s more, parents providing financial support to children are having to do so for longer. The research revealed that parents are now spending more on adult children (those aged 22+) than younger children as higher living costs and stagnated wages take hold. More than one in ten (14%) Britons are financially relied upon by their adult children, spending on average £6,411 a year on them compared to the £3,841 a year being spent on younger children.

Double caring responsibility
Unsurprisingly, few find this support easy, with close to half (45%) saying the financial pressure is challenging, while one in four (25%) have had to take out a loan to subsidise family members and 8% have had to increase their working hours or take on a second job (5%). And it’s not just the cost of support that’s having an impact, but time too. The Sandwich Generation are being hit with a ‘double caring’ responsibility, as they are looking after their children as well as parents and older family members too.

Indeed, nearly half (44%) of people in the Sandwich Generation have to balance working full-time with spending an additional 19 hours each week caring for a parent or older relative and twice as many hours (39 hours per week) looking after a younger relative.

The research shows how the changing nature of modern families is placing real financial pressure on those who are having to provide support to more than one generation. This help often lasts for many years longer than people may have originally thought. ν

Source:
Based on online research conducted by ICM for LV= using a sample of 2,003 UK adults in September 2014. Results have been weighted to a nationally representative criteria.
According to ICM data 3% of GB adults are financially relied upon by younger and older generations (i.e. they have an ongoing or regular responsibility to both generations). This equates to 1.4m people (47,358,000 GB adults x 0.03 = 1,420,740)