Money Matters

Grandpasnet is pleased to publish articles written by Scott Gallacher, a Director of Rowley Turton (IFA) Ltd. The articles provide guidance to Grandparents in various aspects of financial management. We hope you will find them of interest, and suggest that you contact Scott directly if you require further information. Rowley Turton (IFA) Ltd. is authorised and regulated by the Financial Services Authority, firm number 457946.

Retirement at age 65 a thing of the past?

Last year the government removed employer’s right to have a default retirement age (DRA) which had allowed them to force you to retire at a set age, normally 65, even if you wanted, or needed, to carry on working. The removal of the DRA was almost inevitable with the government increasing the state retirement age from 65 to 66 in 2020, with this planned to eventually rise to 68. Had the government not removed the DRA they would have been faced with thousands of people being thrown out of work at age 65 and onto benefits for up to 3 years before their state pension was payable.




We may have to re-evaluate our retirement plans since the traditional idea of retiring at age 65 is unaffordable for the majority of the public due to the following main reasons: -



  • Higher state pension ages,
  • The closure of final salary pension schemes,
  • Lack of pensions / savings (both in terms of amount saved and when people start saving),
  • The high cost of buying your own home,
  • Excessive debt due to a 'have it now' culture,
  • Poor equity investment returns over the last 10 years or so,
  • Low interest rates reducing pension incomes for those retiring now,
  • Increasing life expectancy meaning people living much longer in retirement.

Scott explains that now, more than ever, you need to think smart. He suggests three key stages: -

  1. Pre-retirement - You need to avoid excessive expenditure and look to maximise your savings, investments and pension contributions.
  2. At-retirement - Taking your benefits is a complex area and you need to ensure that you get the most appropriate retirement solution and do not miss out on valuable benefits.
  3. Post-retirement - You must ensure that your money is working for you. This means maximising any tax benefits or allowances and considering investments as opposed to savings.

For further information

Please contact Scott via his website www.rowleyturton.com Note, this article and the website are designed to provide you with general information only and do not attempt to give you advice on any particular investment or to recommend any particular investment to you. Naturally the usual risk warnings should be remembered, i.e. past performance is no indication of future performance, investments and their income can fall in value and returns are not guaranteed. The figures assume inflation of 2.5% pa and net investment returns of 5.5% pa, none of which are guaranteed.