Pensions - Articles - Avoid a scrooge-like Christmas in retirement


When Charles Dickens wrote A Christmas Carol in 1843, Victorians did not have to worry about saving for their later years.

 Life expectancy at birth in the UK was 40.50 years for males and 42.62 years for females (Source: ONS). Those lucky enough to reach 65 were only expected to live for a maximum of 12 years and they were typically from wealthier backgrounds.
  
 With life expectancy largely doubling to 79.00 years for males and 82.70 years for females in 2012, we on the other hand, have the luxury of a longer healthier lifestyle and need to actively plan for retirement. Those reaching 65 have 23 years in retirement on average and with medical breakthroughs and more investment in a healthy lifestyle, this figure is set to increase further.
  
 Although most people understand that budgeting for retirement is paramount, many tend to focus only on day-to-day expenses and perhaps holidays. However special outgoings, such as birthday/Christmas celebrations or car breakdowns, property repairs etc can be overlooked despite their potential heavy costs.
  
 For example, the average household cost of celebrating Christmas is approximately £835 (source YouGov 2012, based on a total UK spend of £22bn on gifts, cards, decorations, food and drink over the festive period), so over an average retirement of 23 years, this adds up to £19,205, almost two-thirds of an average pension pot of £30,000.
  
 This demonstrates how it would be impossible for pensioners to sustain the same level of spending in retirement as they enjoyed during their working life. However, planning and budgeting for these special outgoings and events could avoid you making too many scrooge-like decisions in retirement.
  
 It is also important to bear in mind the effects of inflation (i.e. the tendency for prices to rise over time). For example, the price of turkey has risen by 41% from £14.89 in 2008 to £21.00 in 2014 and 100g of smoked salmon now costs £4.00 i.e. 61% more than in 2008 when it was sold for £2.48 (Source: The Grocer).
  
 Mark Wood, Chief Executive, JLT Employee Benefits, said:
  
 “Christmas is a time to celebrate and no one likes to be a scrooge. But more crucially, no one likes to worry about money. The single biggest difference people can make is to save more and earlier for their retirement. The longer you invest, the greater the potential for your funds to grow.”
  

Back to Index


Similar News to this Story

94 percent view State Pension as an entitlement not benefit
Majority of adults aged 66+ say that Triple Lock is affordable and fair to older generations. Around one in seven rely on the State Pension to provide
Fair play off the pitch
Male players in the English Premier League earn an average of more than £3 million per year, while their female counterparts average around £47,000. T
Why Bitcoin matters to Pension Schemes
Back in November 2024, Cartwright Pension Trusts announced its role in facilitating the first-ever UK DB pension trust investment in Bitcoin. With the

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.