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8 financial need-to-knows for over-65s

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This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincolnshire or other local offices.

The UK population is getting older. In fact, there are now more over-65s in Britain than children under age 15. People in retirement face unique economic challenges; not least because you no longer rely on a salary to support your lifestyle. Declining health, underdeveloped digital skills and falling mental capacity can also pose potential challenges. Fortunately, there are ways to prepare a financial plan to get the best from retirement.

Below, our financial planners in Grantham, Lincolnshire offer eight ideas to help older people optimise their wealth and finances. We hope you find this content helpful. If you want to discuss your own financial plan with us, please get in touch to arrange a no-obligation financial consultation, at our expense:

01476 855 585


#1 Aim to pay off your home

It is possible to rent in retirement, but this usually requires building up a much larger pension compared to a homeowner (to cover the monthly rent). One study suggests that 42% of your retirement income could go on rent as a private tenant. In some areas, such as London, it may become impossible to rent unless you are very wealthy.


#2 Be wary of pension scams

Older people are particularly vulnerable to scams as fraudsters target the significant life savings that individuals have accumulated. Cold calling about pensions is now illegal, but it still happens (e.g. from overseas scammers). Watch out for suspicious emails, text messages, social media posts/messages and online adverts – particularly if they claim to help you access your pension before age 55, or if they offer an investment that sounds too good to be true. Be careful not to click on links, as these often take you to a fake webpage that tries to steal personal information.


#3 Plan your pension income

Most people will rely on their State Pension and other pensions (e.g. a workplace scheme) to fund a retirement lifestyle. Make sure you get the best State Pension possible by building up as many “qualifying years” of National Insurance (NI) contributions as possible. You need 35 to get the full new State Pension, which is £9,627.80 in 2022-23. A financial adviser can help you find out how much extra you need to save in other pensions to provide a sustainable income.


#4 Don’t neglect your care plan

In 2020 there were 490,326 people living in care homes in the UK. This number is likely to rise as the population continues to age. The average weekly cost of living in a residential care home is currently £704, or £888 for a nursing home. The government has capped an individual’s total social care spending at £86,000, but this doesn’t apply to all care-related costs (e.g. food) and so you could end up spending more. Speak to a financial adviser about how you can prepare your wealth and finances for this potential outcome.


#5 Think about your investments

Holding a large portion of your wealth in cash is unlikely to see you through retirement, since its value will erode over time due to inflation (9.1% at the time of writing). You will need to consider other asset classes, such as equities and fixed-income securities, to ensure that your pension savings are sustainable. The precise asset allocation you choose will depend on many factors including your likely retirement timescale, your risk tolerance and desired level of income.


#6 Set up a will and power of attorney

Without a will, your estate will be divided according to the UK’s “intestacy” rules, which may not allocate your assets to the right people, or in the most tax-efficient way. Establishing a clear will, helps prevent confusion amongst executors and squabbles between beneficiaries (e.g. children) later. Power of attorney is also important to consider, as this will bequeath power to a trusted person to make decisions about your estate on your behalf, if you are unable/unwilling to make independent choices anymore (perhaps due to declining mental health).


#7 Don’t neglect your estate plan

If you plan on leaving wealth to loved ones (and/or to a good cause) when you die, then you need a strong estate plan to account for inheritance tax. IHT is levied at 40% on the value of an estate over £325,000. Fortunately, there are many strategies available to help mitigate needless tax on your hard-earned wealth. These include using the Main Residence Nil Rate Band, gifts (such as your annual exemption), investing in assets that qualify for business property relief and leveraging trusts. A financial adviser can help you with this.


#8 Keep within a sensible budget

Similar to life during your career, it is sensible to keep your monthly expenses under control in retirement. Arguably, it is even more important as you only have a set amount of money to draw from (which could run out). During periods of higher inflation, for instance, be careful about taking more from your pension than you normally would to cover the shortfall. This could cause your pension to deplete faster than originally planned. Always seek financial advice if you are unsure about how to navigate pension withdrawals during uncertain economic times.


Conclusion & invitation

If you are interested in discussing your own financial plan or investment strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:

01476 855 585