Those not taking steps to build a nice nestegg for retirement really are setting themselves up for a fall. That’s because pensioner poverty is a real and growing problem in the UK.
Citizens can’t rely on the paltry State Pension to provide a decent standard of living once they leave the workplace for the last time. And things could get even harder in the years ahead as lawmakers consider axing the Triple Lock mechanism which guarantees minimum annual rises for claimants.
It’s truly a shock to discover that millions of us are still failing to protect ourselves from having to live on the breadline in our later years. Latest data from workplace pension fund NOW: Pensions, in fact, shows a jaw-dropping 1.2m women in their 50s have no form of private pension at all. That means they will likely have to rely on a partner, or the state, to provide any sort of income in retirement.
Women must save more than men
Look, we at The Motley Fool get it. The cost of living is high nowadays and this can have a devastating impact on how much you can put away. And things are particularly difficult for women who have to take time away from work to look after a family.
NOW: Pensions estimates this particular issue is responsible for women enduring an average 47% reduction in their pension wealth versus men’s pension wealth by the time they reach their late 50s.
Yet, on average, women live for 3.7 more years than the opposite sex, something which means they need to have save between 5% and 7% more than men by retirement age to allow them to enjoy the same pension income throughout their retired lifetime.
Get busy!
For women and many couples, then, the heat is on to make sure you’re taking charge of your savings to avoid falling into a poverty trap. And this means putting your money to work in the right places as well as not waiting for tomorrow to start wealth building.
Stock markets might be scary right now, what with news of trade wars, a possible global recession, and Brexit all splashed across the front pages. But, arguably, there’s never been a better time to invest. The dividends that global companies are shelling out currently sit at record highs and, for Brits, there’s plenty of brilliant income shares to choose from right now.
On the FTSE 100, investors can grab big yielders. From housebuilder Persimmon, to banking giant HSBC, or insurer Aviva, companies are offering giant near-term dividend yields of between 6.5% and 12%. Or businesses such as Bunzl and Diageo, firms whose desire to raise dividends each and every year for decades, have now encouraged me to buy them.
If you have little or no savings, it’s critical you get your money working hard for you and as soon as possible, whether you have just a few hundred pounds, or tens of thousands. Fortunately there’s a treasure trove of information out there to help you achieve your retirement goals, so start researching today.