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As the older population grows, so does the number of pensioners we have in the UK.
The number of people at state pension age is projected to increase to 13.7m in 2032 from 12m in mid-20221.
But how can prospective retirees start putting a plan in place for their finances?
The best plan for a successful retirement may be to slowly build up your retirement pot over time, but even if you’re a bit behind on sorting out your money, the next best time to start is now.
You can begin by finding out the earliest age you’ll start receiving your state pension and use this date as a goal or sooner if you’re preparing to retire earlier.
There are many online calculators that will do all the hard work for you such as moneyhelper.org.uk. After inputting details such as your date of birth and salary, it’ll work out your state pension age as well as give you a target retirement income based on what people in the same salary range said if you’re unsure of an amount to aim for.
You can then see if you currently have a shortfall or surplus amount towards your target income for retirement. If you have a shortfall you can see how far you need to grow your savings, and even if you’re on track you might have set your target income at a basic level and wish to boost your savings for a more comfortable retirement.
Of course, your financial circumstance may change over time, but this amount should help as a starting point and you can always revisit your goal as needed to stay on track.
Now that you know how much you ideally want to save, you could add to your pension pot by growing your savings with tax-free interest in an ISA - for the 2025/26 tax year, the ISA allowance is up to £20,000.
If you have a chunk of savings or you’re fairly close to retirement you might feel secure locking your savings into a typically higher interest rate with a Fixed Rate Cash ISA for one or two years.
However, if you’re making long-term plans for your finances, it could be useful having more flexibility to access your money should you need it, and an Easy Access Cash ISA could be a better fit.
You can always be ISA wiser by reading more about the key information and benefits on our dedicated ISA hub, or go straight to our award-winning ISA products to see what’s available.
1 National population projections - Office for National Statistics
Your eligible deposits held by a UK establishment of Charter Savings Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK’s deposit protection scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit www.fscs.org.uk.
