The full new State Pension is £164.35 per week. However, the amount retirees receive will depend on the number of years for which National Insurance was paid. This provides an annual living amount of just £8,546.20.

For some retirees, this is an ample sum to live on whereas, for others, it’s not enough to cover the basics. It all boils down to what lifestyle you would like to lead when you retire as to how far your state pension could stretch. However, for the majority, it is not enough.

The government has also alluded to the fact that living off of the state pension is not realistic. In their document, Your State Pension Explained, it is stated that, “for many people, the state pension is only part of their retirement income.” Therefore, retirees are opting to invest or save to supplement their retirement funds.

Outline your retirement goals

Understanding what you want from your retirement will help you focus on the best pension path for you. Do you want to focus upon your grandchildren? Would you like to move overseas? Would you like to take up a hobby? Regardless of your specific plans, you are going to need income and £164.35 a week does not stretch very far for most.

The spender

For those who don’t have a lot of savings to fall back on, spending as you wish is a risky move for some pensioners. However, those from high earning jobs have the potential to simply spend all of their money before they die by investing in family and friends through experiences and holidays of a lifetime. However, with people living longer and longer, it is hard to predict how long retirement will be, making this option attractively freeing but also not without risk.

The safe zone

Many people want a comfortable retirement, free of money worries, whilst not breaking the bank with spending. Some retirees have had to rely on their children or return to work after underestimating retirement costs.

The lifestyle overhaul

Many retirees-to-be have been looking after dependants for the majority of their adult life and working tirelessly. For this reason, aiming to improve your lifestyle upon retirement is a popular choice for many and this is unachievable when relying solely on the state pension.

Increase wealth

If you have had a financially comfortable life, your retirement goal may be to grow your wealth further. Many retirees who fall into this category have experience in banking or investing and tend to pass money down through the family.

Funding your retirement

Deciding on the path you choose to take upon retirement means you can put a plan together ahead of time on how you are going to achieve it. Planning for a long retirement is now the norm as life expectancy averages continue to grow. You should be able to make a rough estimation of your retirement costs by weighing up your non-discretionary and discretionary spending, as well as any savings, investments or other incomes.

Alternative income sources for retirement

Whilst there are some concrete ways to invest for retirement, there is also an array of opportunities outside of the usual savings accounts, ISAs and bonds.

Peer-to-peer lending

Peer-to-peer lending, in simple terms, allows individuals to invest money, often through an online platform. P2P providers, like Huddle Capital, act as the intermediary between investors and borrowers. At Huddle Capital, we have an innovative lending platform that allows individuals the opportunity to diversify their investment portfolio and make their money work harder for them.

The Benefits of P2P Lending

Peer-to-peer lending can be an attractive alternative to a traditional investment opportunity. Retirees who have investing experience and are prepared to accept a level of risk will also benefit from the following:

  • attractive interest rates
  • investors can spread capital across multiple investments
  • investors and borrowers have transparency
  • regular income
  • portfolio diversification

The state pension is not enough

Knowing how much to put away is a challenge and figures released suggest that, on average, a retiree has a pension pot of £105,496. This works out at an income of £5,000 per year. With research revealing that to live at the minimum acceptable standard during retirement costing £10,000, there is a serious problem.

Future retirees are encouraged to be proactive with their finances to account for the fact that relying on a state or workplace pension isn’t enough. Many are putting their money into investment opportunities to secure a comfortable future.



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