The Elderly Facing £10,000 Savings Gap – The Reason You Should Act Fast

23 September, 2021 by Denzil Otieno 4 mins read Category:  Money Personal Finance

According to the Yorkshire Building Society’s “The Nation’s Nest Egg” study, the United Kingdom faces a £371 billion savings deficit. Even though many people have managed to save more money in the previous 18 months, this demonstrates how distant many people are from financial security. The deficit amounts to £7,200 per individual on average. The problem is worsened for individuals between 45 and 54, who have a £10,280 savings gap.

The Inflation Will Keep Rising 

As inflation reaches new heights, many people, regardless of age, will need to examine how they can stretch their money further and may need to undertake several changes.

Tina Hughes, director of savings at Yorkshire Building Society, spoke to about how people can make their money go further in older age.

To begin, Britons should evaluate whatever existing savings they may have because a low-interest environment means that the majority will need to make sure their money is working as hard as it can. According to recent data, roughly £246.5 billion in accounts pay no interest at all.

Ms Hughes said that if people had money in their current account, they should shop around to see if any of it might be transferred to easy access or fixed-term account. These may result in lower interest rates, but only in return for limited access.

Look Into Your Spending Habits 

A second approach to stretch one’s money is to examine one’s spending patterns, which is a great strategy to improve savings.

Ms Hughes noted that whether it’s examining your direct debits to see if there’s anything you’re paying for that you’re not using or simply cooking your lunch instead of buying one from the store.

She continued to say that, with rising energy bills and tariffs, make sure you’re on the best deal possible since this can save you money. Minor adjustments can make a big difference, especially when inflation is at an all-time high and outgoings are certain to rise.

Examining one’s mortgage in depth is one of the most effective ways to save money. Despite rising home prices, mortgage rates are decreasing, so if someone has reached the end of their contract, they might refinance to lock in the best rate available.

Remortgaging as an Ideal Solution

Remortgaging is frequently seen as one of the most effective strategies to reduce monthly payments. Because this is likely to be a person’s most lavish monthly outlay, it may make a significant impact.

Older individuals, on the other hand, are urged to consider downsizing. They might profit by selling a more expensive home instead of a less expensive one and putting the difference in a savings account.

Ms Hughes also advised people to examine their pension pots to figure out how to make them work as hard as possible to ensure their future.

She said that if you can afford it, it’s worth boosting your job pension payments as much as you can. She added that many companies would match your contribution to a specific proportion, ensuring that you create a more substantial pension with their money.

Those over 55 are eligible for a pension drawdown, enabling them to withdraw a quarter of their pension value tax-free.

Investing these funds might be a flexible alternative for people who wish to boost possible returns on their pension. Still, as with any investment, there are dangers, so seek financial advice before making any decisions.

Finally, Ms Hughes noted that some people may be financially disadvantaged and may require further assistance.

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