For many, New Year is a time for setting goals and putting in place new routines. While this often centres around health and wellbeing, it’s important not to overlook financial goals, particularly longer-term goals which can often be put to the back of the mind amid immediate financial priorities.
Adults in mid-life are at key life stage when it comes to financial planning as they look ahead to retirement. Research from Phoenix Group’s longevity think tank, Phoenix Insights, found that visualising what retirement could look like is the most important way to keep this group motivated to save*.
Top ways midlifers stay motivated to save for retirement:
1. Visualising what they want their retirement to look like (30%)
2. Regularly reviewing their expenses (26%)
3. Planning with their spouse or long-term partner (22%)
4. Setting themselves clear goals for how much they want to save (21%)
5. Talking to friends and family about their plans (11%)
Recent cost of living pressures and interest rates have impacted people’s ability to save. Nearly two thirds (63%) of people in mid-life say their saving has been impacted by rising prices and a further fifth (20%) by higher mortgage cost. But despite these challenges, the majority (72%) agree it’s “never too late” to start thinking about saving for retirement.
Phoenix Group's Patrick Thomson, Head of Research and Analysis at Phoenix Insights, said: “Saving for retirement may not have been top of people’s priorities in recent years amid cost-of-living pressures and rising interest rates, but it’s important people don’t overlook their long-term finances. The New Year provides a great prompt for people to take stock of how much they have saved and put plans in place to close any savings gap. And with inflation cooling in recent months, households might have some additional respite from the cost of living squeeze to enable this.
“For those in mid-life, it’s particularly important they start to plan ahead as many are not on track to achieve a decent retirement income. This generation is characterised by lower rates of final salary pensions than those preceding them, and they will also miss out from a lifetime of saving under auto enrolment.
“Just thinking about finances can often be the hardest part of retirement planning. It’s never too late to think about long-term saving, but the sooner this process is kick-started the better.”
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