Only 32% of Brits know where their pension is invested. Photo: Getty
The state pension age for both men and women will rise to 66 on 6 October.
When the State Pension was introduced in 1948, a 65-year-old could expect to spend 13.5 years in receipt of it – about 23% of their adult life, according to a government analysis. This age-span has been increasing ever since.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Latest projections from the Office for National Statistics show that the number of people over state pension age in the UK is expected to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042.” data-reactid=”25″>Latest projections from the Office for National Statistics show that the number of people over state pension age in the UK is expected to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042.
“More than a decade of rising pension ages has made an enormous difference to people’s working lives. However, so far, it hasn’t made enough difference to their pensions,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
“We don’t know how much we’ve saved, or where it’s invested, and two thirds of people aren’t confident they’ll be able to afford retirement. Women are in a particularly worrying position, because almost three quarters aren’t sure they can ever afford to stop work.”
But whatever the circumstances, there are ways you could make a better pension investment and boosting your retirement income. Below is what experts at Hargreaves Lansdown say help you make the most of your pension.
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Five steps to better pension investment” data-reactid=”30″>Five steps to better pension investment
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Don’t be afraid to admit you don’t know” data-reactid=”31″>Don’t be afraid to admit you don’t know
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Going back to basics about what a pension is and how it works can make things a lot clearer. There is plenty of useful resources online, including the Money Advice Service, a government backed service giving free and impartial money advice, and the Pensions Advisory Service, as well as information from pension providers.” data-reactid=”32″>Going back to basics about what a pension is and how it works can make things a lot clearer. There is plenty of useful resources online, including the Money Advice Service, a government backed service giving free and impartial money advice, and the Pensions Advisory Service, as well as information from pension providers.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If it’s a workplace pension, speak to your employer” data-reactid=”33″>If it’s a workplace pension, speak to your employer
Your employer will be able to tell you about your company pension and should have information booklets to explain how it works. If you don’t feel like working your way through written information, ask for a meeting where someone can explain it fully for you.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Check what you’re invested in ” data-reactid=”35″>Check what you’re invested in
If you don’t know where you’re invested, the chances are you’ll be in your scheme’s default fund — because this is where you end up if you haven’t made an active investment choice. Ask for a copy of the default fund factsheet, which will show you the charges you’re paying, and how the investments have grown compared to the average of similar funds.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Work out if your investments are right for you” data-reactid=”37″>Work out if your investments are right for you
If you’re in a default fund, it’s likely around two-thirds of your pension will be invested in shares. This gives you the best chance of growing your money. The rest will probably be in bonds and cash which tend to fluctuate in value less.
If you’re under 40 you can consider having a larger proportion of your pension invested in shares. Most pensions will give you some alternative options, so ask for details or take advice to get the right investments for you.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Set a date to review your handiwork” data-reactid=”40″>Set a date to review your handiwork
Set a date to look at your progress – it can be helpful to get into the habit of checking up on your pension at least once a year. When you do, check how the funds are doing and if they are still right for your circumstances.
“If you’re at an earlier stage in your career, the key is putting aside as much as you can afford as early as you can afford to do so. If you have opted out of your workplace pension, or weren’t automatically put into it because you earn less than £10,000, talk to your employer about getting into the scheme. Once you start paying in, they’ll have to do so too — so your efforts will be magnified,” said Coles.
It is also advisable to reassess your retirement choices. The below tips could be helpful.
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Five key questions you should ask to get your pension on track” data-reactid=”45″>Five key questions you should ask to get your pension on track
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="What kind of retirement do I want? ” data-reactid=”46″>What kind of retirement do I want?
It’s a good idea to ask yourself when and how you plan to retire, and what kind of lifestyle you want to be able to afford.
This will help you work out how much money you need after you retire — and when you need that income to begin.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How much of a lump sum do I need in order to generate that income? ” data-reactid=”49″>How much of a lump sum do I need in order to generate that income?
The experts recommend using an online pension calculator to give you a good general guide as to what you need to save.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How much have I saved so far? ” data-reactid=”55″>How much have I saved so far?
It’s worth looking up the paperwork for any pensions you have, and checking what’s sitting in the pot.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How much do I need to contribute — and for how long — in order to build that lump sum?” data-reactid=”57″>How much do I need to contribute — and for how long — in order to build that lump sum?
Again there are lots of pension calculations online that can help you answer this.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How much do I want my pension investments to grow, and what risk am I prepared to take?” data-reactid=”59″>How much do I want my pension investments to grow, and what risk am I prepared to take?
Figuring this out will help you decide on the kinds of investments that should go into your pension portfolio.
Meanwhile, a survey has found that only 36% of people are confident they’ll ever be able to afford to retire.
Financial uncertainty is affecting women more than men with just 26% of women confident they’ll ever be able to afford to retire, compared with 46% of men.
Just a third of Brits know how much income they’ll need in retirement and only 37% of people have a clear idea of what their pensions are worth, according to the survey by Hargreaves Lansdown.
It also showed that only 32% know where their pension is invested, with the majority confused about what was happening with their cash.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
