pension advice glasgow

Retirement can be an expensive business. Living longer means we need more in our retirement pots to fund the lifestyle we desire in later life. But how much harder has the ‘pension mountain’ become to climb in recent years? Much harder, it turns out.

New research from mutual insurer Royal London has revealed the extent of the challenge, finding that a pension pot of £260,000 is needed in order to avoid an uncomfortable retirement for the typical worker.

This ‘pension mountain’ has grown in size in real terms by three quarters since 2002, when it stood at a relatively modest £150,000.

And for those younger generations who can’t afford to get on the property ladder, the pension mountain they need to climb is even bigger. This is because lower levels of home ownership mean having to continue paying rent in retirement.

Those who rent face a bigger challenge

Renters in retirement face a pension mountain of £445,000, some 71% higher than the financial challenge faced by homeowners seeking to avoid an uncomfortable retirement.

The research was shared in a new policy paper from Royal London, ‘Will we ever summit the Pensions Mountain?’ It’s an important piece of work, seeking to answer a commonly asked question – how much do I need to save for my retirement?

The answer is of course very different for all of us, depending on a number of factors. The amount you need to save for a comfortable retirement will depend on how much income you need, how much you have already saved, and at what age you plan to stop working, among other considerations.

To calculate the figure for their own research, Royal London considered an average earner on a salary of £27,000 a year. They assumed a full state pension of just over £8,500 a year and no mortgage costs to pay in retirement.

Assuming that workers who can retire on two-thirds of their pre-retirement wage will see no fall in their standard of living when they stop work, they would need a private pension income of just
over £9,000 in addition to their state pension income.

Going back in time to 2002/03, when interest rates were much higher than today and life expectancy was lower, a pension pot of £150,000 was needed to make up enough income to live comfortably in retirement, based on this scenario. Fast forward to today, and the pension pot required has grown to £260,000. This figure represents the new pension mountain.

And for people who don’t own their homes as they enter retirement, a further £185,000 would be needed to provide the additional income needed to pay rent in retirement. This brings the total
pension mountain for renters to £445,000.

Commenting on the research, Helen Morrissey, Personal Finance Specialist at Royal London said:

“This research is a reminder that when we save for retirement we are chasing a moving
target. If our retirement pot is going to support us through a longer retirement and in an
era of lower interest rates, we are going to need to build a much bigger pot than in the

“More worrying still, we can no longer assume that we will be mortgage-free
homeowners in retirement. For those unable to get on the property ladder during their
working life, a large private rental bill needs to be factored into retirement planning.”

“For all of these reasons, we cannot afford to be complacent about current levels of
retirement saving.”

Retirement planning

If you’re concerned about climbing your own pension mountain, it’s never too late to start planning for retirement.

A great place to start is a calculation of your own number. Rather than being a scary figure, you might be pleasantly surprised at how achievable it is. What’s important here is calculating a ‘pension mountain’ figure that is personal to you, so you can get to work on climbing that mountain and living a comfortable retirement.

Do get in touch if you would like to find out more by email or 0141 231 1656.

Why is income protection important

Why is income protection insurance important?

No one likes to think that anything unhealthy can happen to them, however, if you couldn’t work because of a significant health problem or accident, how would you manage financially?

Could you survive on savings or sickness pay from work? If not, you’ll want another way to keep paying the bills – and you may wish to think about income protection insurance to fall back on should the worst happen.

Although, 10.8 million UK households could be in danger of their income falling by a minimum of a 3rd if the main wage earner stopped working because of sickness or an accident [1] let’s look at 3 groups according to a recent LV survey most at risk.

The Self Employed

Income protection insurance for self employed

The self-employed in the UK consists of 4.8 million workers contributing £255 billion to the UK economy, off those surveyed:

  • 3 in 10 (28%) worry about not being able to work.
  • Nearly 2 million are unable to save any money each month.
  • A staggering 4 in 10 believe they are not eligible for income protection insurance.

 Generation Debt

income insurance broker

Generation debt or known as late millennials consist of 24 – 35-year-old and typically rent, there top reason for debt are:

  • repaying student loans (40%) and credit card bills 32%.
  • 4 in 10 don’t save any money each month.
  • more than 4 in 10 aren’t confident in their ability to handle a personal financial crisis.

Middle Britain

Income protection insurance


Consisting of 13 million typically working families with children and income ranging from 25k and 45k they are generally skeptical about income protection although:

  • 75% said they spend the majority of income on household bills.
  • 3 in 5 falls below the recommended MAS saving recommendations.
  • 4 in 10 with credit card debt.

You might assume this might not happen to you (and, of course, we tend to hope it doesn’t), however, it’s vital to recognise that nobody is immune to the financial impact that would occur due to ill health and accidents.

What is Income Protection Insurance?

what is income protection insurance

Providing a regular monthly payment into your household is a financial lifeline, income protection insurance is a long-term or short-term insurance policy that will provide you with a monthly payment if you can’t work as a result of sickness or accidents that can keep you from working and generally pays out till you return to work, or until you retire, die or the maturity of the policy – whichever is sooner.

What are the benefits of income protection insurance?

  • It replaces part of your income if you can’t work because you become ill or disabled.
  • It pays out until you recover and can start working, or up to you retire, die or the end of the policy term – whichever is sooner.
  • There’s a waiting period before the payments start, that you agree when you set up the plan, this can be 1 day. 1 week, 1 month, 2 months, 3 months or 6 – 12 months, for those with employer sickness pay arrangements in place, you set your cover to begin when your sickness pay ends. The longer you wait, the lower the monthly payments.
  • It covers most illnesses that leave you unable to work, either in the short or long term (depending on the sort of policy and its definition of incapacity)
  • You can claim as many times as you need to while the policy lasts.

What about Employment Support Allowance?

You can get financial and work-related support through Employment and Support Allowance (ESA). You’ll normally get the assessment rate for 13 weeks after your claim. This will be:

  • up to £57.90 a week if you’re aged under 25
  • up to £73.10 a week if you’re aged 25 or over

After that, if you’re entitled to ESA, you’ll be placed in one of 2 groups and will receive:

  • up to £73.10 a week if you’re in the work-related activity group
  • up to £109.65 a week if you’re in the support group

You might get more ESA in the work-related activity group if you applied before 3 April 2017.

  • If you’re in the support group and on income-related ESA, you’re also entitled to the enhanced disability premium at £15.90 a week.
  • You may also qualify for the severe disability premium at £62.45 per week.
  • If the assessment takes longer than 13 weeks your benefit will be backdated to the 14th week of the claim.

How much does income protection insurance cost?

How much you pay monthly can depend upon the policy and your circumstances, and also the price of a policy can vary based on:

  • Your age
  • Whether you smoke or have previously smoked
  • Your health (your current health, your weight, your family medical history)
  • Your occupation
  • The percentage of income you’d like to replace

Should you consider income protection insurance? 

With income protection insurance, everything depends on getting the right policy, and it doesn’t matter whether or not you have children or other dependants – if illness would mean you couldn’t pay the bills, you should consider income protection insurance.

For more information or to discuss your requirements, please contact us today – we look forward to hearing from you.

retirement planning glasgow

Retirement Planning

Retirement should be an exciting time, and these days there’s more scope than ever to arrange your finances the way you want them.

Retirement means different things to different people. For some, it’s a definite point in time when work stops and a new phase of life begins. For others, retirement may be a gradual process where they vary their working hours as priorities shift, or perhaps leave employment and then return.

Sometimes, retirement comes earlier than expected, for example, because of redundancy or poor health.

Whatever your path to retirement, one of the big challenges most of us face is how to pay for it. The financial aspects are often complex, and getting reliable and trustworthy information is vital.

Our infographic below highlight 6 steps you can take to ensure a brighter retirement.


retirement planning glasgow

finding Lost pensions

Pensioners embracing the benefits of retirement and new-found time.

As with any new life stage, planning often helps a smooth transition from the old to the new. Preparing properly for anything new requires planning and commitment. Spending time on planning now will ensure you enjoy the retirement you’ve worked hard to achieve.

For many pensioners, retirement has meant a new lease of life according to new research[1] for millions of people who have given up work in the last ten years, with more than one in four (26%) saying they are fitter and healthier since they stopped working. Far from winding down, nearly half of those who have retired since the height of the financial crisis (48%) say they are busier and more active than they anticipated.

Experience of retirement

Through embracing the benefits of retirement and making the most of the new-found time, more than one in three (35%) say they have more time to make their life more adventurous than they could have hoped while they were still at work.

When asked how else their experience of retirement was exceeding their expectations, many of those who have become pensioners in the last ten years pointed to improvements in their relationships. More than a quarter (26%) believe they now get on better with their partner, while 25% think that their relationship with their family is happier since stopping work. Meanwhile, just under one in four (23%) say their social life has improved more than they expected.

Professional financial advice

As people who plan to finish work in the next ten years begin to look forward to their retirement, there’s plenty they can still do to make sure they are as comfortable as the people who have become pensioners over the last decade. Most importantly, in the face of changing pension rules, many people will benefit from obtaining professional financial advice in the run-up to retirement.

Retirement will continue to change over the coming years, but for many people the desire to make the most of their new-found free time will remain. Reflecting on their retirement in general, the vast majority who gave up work in the last ten years (86%) said that it had met their expectations or they were happy with how it had panned out so far, while only one in eight (13%) said that it has been a disappointment.

Thoughts, feelings, emotions

Nearly two in five (37%) thought they would have missed work more than they have since retired, and in fact one in four (26%) wish they had retired earlier. Meanwhile, on reflection, more than one in ten (11%) wish they had been more active or found a job in the early years of their retirement.

It’s important to prepare your thoughts, feelings and emotions for the next phase in your life: a time to look forward to and welcome as a chance to do the things you have been dreaming about, as well as a rest after a long career. There is likely to be a mixture of feelings and thoughts as you start on this new venture into uncharted territory.

Any concerns about your retirement?

If you have any concerns about your retirement provision or would like to assess your personal circumstances to see what type of retirement income your current planning will give you once you’ve retired, please contact Castlebank Financial Planning on 0141 231 1656 or email . If your goals are out of reach, or you’re taking undue levels of risk, we’ll let you know.

Source Data:
[1] Consumer Intelligence conducted an independent online survey for Prudential between 26 May and 5 June 2017 among 751 adults in the UK who had retired within the last 10 years.