3 valuable pension lessons workers can learn from retirees’ regrets

by Phil Clerkin on May 29, 2024

2 in 5 UK retirees have retirement regrets, according to a Canada Life survey. If you’re saving towards your future, you could learn some valuable pension lessons and avoid repeating the same mistakes.

Securing the retirement you want often means thinking about this milestone many years before you celebrate it. One of the key challenges is balancing your financial needs and goals now with your long-term ones. Retirement regrets indicate it’s something many people struggle with.

So, if you’re still working and saving for retirement, here are three lessons you could learn from older generations. 

1. 17% of retirees wish they’d increased pension savings while working 

The Canada Life research suggests one of the biggest retirement regrets is simply not saving enough – 17% of those surveyed said they wished they’d increased their pension contributions. Similarly, 12% said they regret not making lifestyle adjustments earlier in life to allow them to save more for their later years.

While auto-enrolment means you’re likely to be paying into a pension if you’re an employee, simply paying the minimum contribution may lead to a pension pot that falls short of your expectations. 

Indeed, a report from the Phoenix Group, noted: “There is widespread consensus that current auto-enrolment contribution rates are unlikely to provide an adequate retirement income for most savers.”

The report advocates increasing the default pension contribution rate from 8% to 12%. While the current government hasn’t indicated that it plans to do this, you can choose to increase your contributions, and some employers also offer higher pension contributions as part of their benefit package.

As your pension is often invested and benefits from compounding over a long time frame, reviewing your contributions now could mean the extra money really starts to add up.

The report notes that changing the minimum contribution level to 12% now could lead to a typical 18-year-old today having an extra £96,000 in their pension at retirement. However, as the graph below shows, delaying by even five years could lead to significantly less. 

Source: Phoenix Group

Having a clear goal can be useful if you want to ensure you’re saving enough – how much do you need in your pension at retirement to live the lifestyle you want? From here you can work backwards to understand how much you need to contribute to your pension to make your goal more achievable.

Of course, setting a pension pot target isn’t always straightforward. You’ll often need to consider areas like life expectancy, inflation, and investment returns. Working with a financial planner could provide you with a tailored retirement plan that considers these factors. 

2. 43% regret not accessing advice or guidance

Separate research from Standard Life found that more than 4 in 10 retirees regret not accessing advice or guidance either at the point of retirement or when they were still working. The survey results found:

  • 51% wished they had more information about how to plan and prepare for their retirement
  • 42% said they should have sought advice or guidance to plan for their retirement
  • 37% said they should have sought advice or guidance before they accessed their pension savings.

You don’t have to be nearing retirement to benefit from professional financial advice. Seeking advice ahead of retiring could be useful throughout your career. 

A tailored retirement plan could help you assess what steps you may take to improve your financial wellbeing once you stop working, and regular reviews provide an opportunity to see if you’re on track and what adjustments you might make. 

3. 8% of retirees say they would have retired later than they did 

Perhaps surprisingly, the Canada Life survey revealed that 8% of retirees wish they’d retired later than they did. 

For some, this regret may come from wishing they’d delayed retirement so they could contribute to their pension for longer and enjoy greater financial security now. Yet, the report notes that others wished they’d worked for longer due to the potential mental health benefits. 

Work can provide a structure and sense of purpose that some people miss once they retire. Phasing into retirement by slowly reducing your hours or taking a less demanding role could help you strike a work-life balance that suits you.

Incorporating your lifestyle goals into your retirement plan, rather than simply focusing on the numbers, could be useful too. Considering how you’ll fill your days in retirement and what will continue to make you happy might mean you’re less likely to live with regrets. 

Get in touch to start planning for your retirement 

It’s never too soon to start thinking about your retirement. In fact, taking control of your retirement plan sooner could mean you have more options, enjoy the retirement you’re looking forward to, and offer peace of mind during your working life. Please contact us to arrange a meeting to discuss your retirement plan. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

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Phil Clerkin3 valuable pension lessons workers can learn from retirees’ regrets

6 helpful ways to keep yourself active during retirement

by Phil Clerkin on March 30, 2023

A strong financial plan will help you to stay on course to meet your long-term goals, as you navigate your way through life towards your eventual retirement. The aim is that when that day arrives, you’ll be in a position to live the kind of lifestyle you desire.

It can be easy to focus on the financial aspects of your retirement and lose track of what that life will actually entail. After possibly spending decades of your life working on your career, you might find yourself a little lost when your days are suddenly filled with free time. 

One of the many lessons we can learn from the world’s “blue zones” – the regions in which people have the longest life expectancies and tend to live healthy, active lives throughout their 80s and 90s – is the concept of “purpose”.

This notion takes many forms. In two of the blue zones, they have words that conceptualise this idea. In Nicoya they call it “plan de vida” and in Okinawa “ikigai”, both roughly translating as “why I wake up in the morning”. 

Having a positive mindset and things to do with your days can benefit your emotional wellbeing during retirement.

Read on to discover six ways you can keep yourself active in both mind and body, and ensure you get the most out of your retirement years.

1. Consider embracing your creative side and taking up an artistic hobby

According to AgeUK, one of the many unexpected outcomes of retirement is the sudden loss of identity. You might find yourself feeling emotionally drained, isolated, and unsure of how to fill your time. 

Picking up a creative hobby could be a potential solution. It might not have been something you considered in the past, but it could benefit your mental health. You could try:

  • Painting
  • Writing poetry
  • Photography 
  • Learning an instrument
  • Acting

The Mental Health Foundation champions arts as a way for people, especially those later in life, to overcome isolation and rebuild social connections.

You don’t have to discover your inner Van Gogh or Brando. Simply taking the time to switch off and pursue something creative can help your mind stay active and healthy.

2. Unleash your “green fingers” and adopt gardening as part of your daily routine

The blue zones teach us many lessons about how to go about later life. In all five of these regions, exercise is built into daily routines, rather than as a dedicated goal. 

People in these zones typically don’t play physical sports or hit the gym on a daily basis. Instead, they allow physical activity to naturally feature throughout their days.

One of the ways they do this is by tending to their land. Gardening not only keeps your body active as you shovel, water, plant, and oversee your grounds, but can also benefit your diet and your mind.

Fresh vegetables, fruit and herbs can do wonders for your health, so why not consider growing them yourself in your garden?

It’s also great for your mental health and could help you unwind.

3. Become a leader in your local community

Taking an active role in your local community can do wonders for your health and emotional wellbeing.

You can not only leave your mark on other people’s lives and build upon your legacy, but also foster new connections and friendships that might open up all sorts of new avenues of interest for you to pursue during your retirement.

Community engagement can take many forms. You might decide to help with programmes for young people, coach a sports team, help with a charity, or support efforts to revitalise your local area. 

4. Take the time to exercise your mind and body

As part of continuing globalisation, Asian exercise and mindfulness concepts have slowly filtered over to the West.

You will probably be familiar with yoga, meditation, and perhaps even t’ai chi. Once seen as hobbies of the free-spirited fringes of society, they have become increasingly mainstream.

The benefits of these activities aren’t just physical, but also mental.

Stress is well-known to be one of the leading contributors to heart disease and other life-threatening ailments. Staying active in a way that not only keeps your body healthy but also your mind could mean you get the most out of retirement.

5. Reflect on your life and write down your story

The idea of writing your memoirs might be daunting, but it can be an excellent way to acknowledge your achievements and reflect on your favourite memories. 

The exercise helps keep your mind active. It is also an opportunity for you to share your story with your loved ones and descendants. 

You don’t need to write your magnum opus and seek out a publishing deal. You can simply use it as a means for your children, grandchildren, or great-grandchildren to get to know you better.

6. Stay productive with a part-time job

It might seem counterproductive to take on a job when you’ve only just retired. But part-time work can be very beneficial for maintaining a structure in your daily life.

It can also help with giving you purpose and a challenge that will keep you active and feeling productive.

This can take many forms; you might opt to take up consultancy for your old profession or look into a teaching position. Otherwise, you might want to turn a long-gestating idea into reality and start up a new business. 

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Phil Clerkin6 helpful ways to keep yourself active during retirement

Disclaimer: The information provided in our website blogs is accurate and up-to-date at the time of writing. However, please be aware that legislative changes and updates may occur after the publication date, which could potentially impact the accuracy of the information provided. We encourage readers to verify the current status of laws, regulations, and guidelines relevant to their specific circumstances. We do not assume any responsibility for inaccuracies or omissions that may arise due to changes in legislation or other factors beyond our control.

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