Can you truly depend on your state pension?

For decades, we have been hardwired to undervalue the State Pension. Perhaps you can’t do much with £221 a week. However, £11,502 a year seems like an amount worth having.

And it is. If you’re a couple receiving £23,004 per year, then you’re probably a good way towards meeting all of your essential expenditure before you even touch any private pension funds.

My message then is simple: Let’s celebrate the State Pension. But, like with lots of positive things, we also need to be careful. There are only limited circumstances in which State Pensions can be passed between spouses, and even then, the amounts are significantly reduced.

When it comes to pension planning, we should remember Denis Waitley’s famous words: “Expect the best, plan for the worst, and prepare to be surprised.”

In retirement planning, this is achieved through Cash Flow Modelling. This financial planning tool helps you plan for a secure retirement by accounting for various potential financial challenges and life changes – for example, the early death of a spouse or needing residential care later in life.

While considering these circumstances might seem sobering, it is only by stress-testing these models until they break that you can fully understand your security in retirement. And the earlier you start engaging with these models, the more opportunity you have to ensure you are on the right track.

Take the first step towards a more secure retirement by booking a consultation with one of our financial planners today.