The importance of a Financial Plan

There are many people who think using a Financial Planner is a waste of time and money.

However, there are more and more more people working past State Pension age to ensure their standard living doesn’t suffer. The question is – would you rather continue working past your intended retirement date or see if advice from a Financial Planner can get you to retirement sooner?

You could put a plan in place yourself, but will you follow it?  Do you know how much you need to save in order to produce the level of income you require? Are you saving in the most tax efficient way?

Would you go to the dentist or carry out your own dental work?

A recent report conducted by HSBC  – ‘The Future of Retirement A New Reality’ , stated that people with a financial plan in place prepared by a Financial Planner are likely to save more for retirement.

Many people are put off the whole idea of pensions and think that putting money into a pension is a waste of time.  This is generally because of the bad press pensions receive.  So the question is – do you believe everything you read in the press?  Is putting £100 into a pension and having £125 invested such a bad idea?  With the correct advice from a Financial Planner it shouldn’t be.

But putting a financial plan in place is not just to ensure you have your desired level of income in retirement, it should be used to help you achieve your goals.

Nobody’s goal should just be having adequate income in retirement, that’s a necessity; an actual goal could be, for example, spending more time with friends and family,  learning a new hobby or writing a book.

The HSBC report also found that in the UK only 38% of people surveyed were regular savers – the second lowest in the world. Only Egypt was lower. Millions of people in the UK are not  saving enough to have the income they are likely to want in retirement and with life expectancy in the UK  increasing, the need for people to plan their future is becoming more critical.

Starting from October 2012 employers will automatically enrol their workers into a workplace  pension if they meet certain criteria. This may go some way to closing the savings gap, but will it be enough? And what about the 4.2million self employed workers in the UK? It’s a start but much, much more needs to be done.

In our view planning is key to ensure you can reach your goals in retirement.

” A goal without a plan is just a wish”  – Antoine de Saint-Exupery

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