Close the gate before the financial horse has bolted

Make sure the stable door is shut or the horse could bolt

Ask any farmer and they'll tell you: there's no point shutting the gate after the horse has bolted.

Just last week we mentioned the financial challenges we face when trying to meet the cost of Christmas. For presents alone, we will spend on average £420 this year, but for those in their late 30s and 40s it's a lot more, somewhere up around £522.

Well, with perfect timing, the pensions consultancy Aon has published a report that adds to this, and is full of fabulous information for anyone saving into a pension who is still 50 or under.

The mid-career age group from 35-49 have generally been recognised as having particular challenges in pension saving, but their situation shows what the future holds for you, if you are a younger worker in your 20s or 30s as well.

The 35-49ers are called ‘the sandwich generation' , sometimes also known as the ‘squeezed middle'. They are ‘sandwiched' between two generations, often having to support children but also assist their own parents as well.

In their ‘DC and Financial Wellbeing Member Survey 2018', Aon find that the ‘sandwiches' are the age group that finds it hardest to save, due to the financial burdens named above, combined with all the other debts that come with a mortgage, kids going through education, and family life in general.

Having surveyed over 1,000 workers paying into a defined contribution workplace pension, Aon found around a third of people saying they'd be unable to come up with £1,000 to deal with an emergency. When I read that, I thought of an article I read elsewhere this week that suggested that many of us are ‘just two wage packets away' from falling behind on our major debt repayments.

Consequently nearly two-thirds (59 per cent) of 35-49s feel they are not saving enough for their long-term needs, and half say they have no power to change that – they simply cannot save more, while a quarter (28 per cent) say they could save more but do not.

As so often in pension planning, we find there can actually BE no planning, unless you get hold of the right information. It's particularly worrying that two in five (41 per cent) have no idea how much they would need to have saved in their pension pot, in order to fully retire.

However, there is a sense among the group that information is vaguely ‘a good thing', but one which they have not been given, or gone looking for. Life's too short to take the time to plan your retirement? “We'll be grand,” as the captain of the Titanic said, pulling out of Southampton.

Stepping aside from Aon's fine research for a second, I recall another report where Aviva showed how good an idea it is, to go and find out what you need to know and do in your retirement planning.

They found that two-thirds (68 per cent) of today's retirees who began planning for retirement a long time in advance say that their retirement exceeded their expectations. For those who made no plans, less than half (48 per cent) were able to say the same.

In our second article next week, we'll be looking at exactly how financial advice can turbo-charge your retirement planning, in ways that won't necessarily cost you a lot. It's all about having the right information.

So get in touch – we can help close the gate, before the horse has bolted!

:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at

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