A sobering report by The Guardian suggests that one in three Britons could be forced to rely solely on their meagre state pension.
Whilst the full state pension allowance currently sits at £159.55 per week, that figure is reserved for individuals with complete national insurance contribution records. If your records are incomplete, you could well find yourself with even less as you age out of the workforce.
As investment advisers readily note, individuals and families who invest early and often have better chances of benefiting from compound interest. But those who by choice or necessity have waited longer to begin investing for retirement have recourse as well. These five frugal strategies can help you stretch your savings further as you approach retirement, however modest they may be.
- Maximise Your Savings
For the remainder of your working life, commit to maximising your savings. Your “maximisation” commitment will be different than your neighbour’s, of course, because your income, budget, and existing savings vary as well. The important point to remember is that your money is worth more in an investment account than in your wallet, where you’re liable to spend it away.
- Trim Discretionary Spending
Maximisation is easier — and more effective — when there’s less discretionary spending to impede it. Identify specific expenses that you could stand to reduce or eliminate entirely: for instance, landline telephone, subscription box services, or that daily morning latte. If it helps, identify possible replacements: for instance, home-brewed coffees in reusable takeaway cups.
- Consider Downsizing Your Home
Once the kids take flight, you might not need a drafty old family home or multi-bedroom flat anyhow. As you take stock of your routine and lifestyle, ask whether you can stand to live in a smaller space, with fewer possessions, amid simpler surroundings. Chances are, you can — though it may take some getting used to.
- Plan Efficient Trips and Activities
If you drive a personal vehicle on a regular basis, examine your driving habits and determine whether you’re planning your outings as well as you could. Every year, Britons make millions of unnecessary car trips, clogging roads and motorways, needlessly increasing the country’s carbon footprint, and wasting countless litres of petrol. These wasted trips are expensive as well — with every journey to the shop or office you’re able to replace with another mode of transport, the lower your monthly petrol bill.
- Consider Retiring in a Low-Cost Area
Why retire inside the M-25 when the (reasonably) low-cost hamlets of Cornwall beckon? Or the sunnier, still more affordable shores of southern Portugal or Spain? Spain in particular remains popular with ageing British expats, with whom its perennial sunshine and cheap flats agree. Other destinations abound — your options are limited only by your willingness to travel and aptitude for new languages.
What’s Your Retirement Plan?
If you’ve yet to devise a comprehensive retirement plan, now’s your chance. Pay less attention to the bottom-most number on your monthly account statements and more on what you can do to ensure whatever resources you do have continue to grow well into your golden years. With luck, you’ll have a long, prosperous retirement ahead.