retired couple figurines sitting on coins

Pensions – Are you saving enough?

It’s estimated that one in four people in work do not pay into a pension, in addition to those who are self-employed and in the gig economy.

In ITV’s ‘Tonight Show’ (Thursday 9th May) poll of 2,000 people, 60% of respondents did not know how much was in their pension pot and when asked how much you need in a personal pension pot to generate £9,000 a year when you retire, a figure of approximately £350,000 came as a big surprise to most people.

Three people were used as a case study to highlight the challenge of trying to live off their future predicted pensions for a week, after all household bills had been paid but excluding food. Of the three, one was making a pension contribution of £400 per month and had been since her late teens, another was contributing £150 per month but had started later in life and the third had not yet started contributing.

Perhaps unsurprisingly, the programme showed that the person who started paying in to a pension from an early age had more of a chance of achieving their retirement goals, whereas the other two struggled to live on the State Pension alone, or slightly above this.

Baroness Roz Altman commented that receiving financial advice from an Independent Financial Adviser could help people boost their retirement funds and that the advice is worth paying for. Financial advisers work with you to understand your needs and aspirations when you want to stop working and will formulate a plan to help you achieve those goals. Those who are exclusively reliant on the State Pension - currently £168.60 per week (£8767.20 per year), but possibly less if they don’t have a full National Insurance Contributions record - are considerably less likely to be able to enjoy a comfortable retirement.

In December 2018 I wrote an article entitled ‘What is Cashflow modelling and why is it important?’ – in which I highlighted that for many people “The more tricky part (of planning for retirement) is … visualising how your various money sources will support you. This is where a cash flow model is invaluable. This isn’t a guarantee of course and the information used will be based on assumptions and past performance, but what it will do is allow you to more clearly visualise your future income stream.”

A cash flow model will help bring to life a visual aid of how your retirement plan will look, and it enables us to consider all parts of your retirement income, not just pensions but cash, investments, property, business assets and so forth.

To those whom tell me their business is their pension or they don’t believe in pensions, I’d challenge you to seek advice and build a cash flow model - put your theory to the test. A cash flow model can of course help highlight weakness and shortfall in financial planning, but it can also provide validation and assurance to plans in place.

Armstrong Watson Financial Planning & Wealth Management is a firm of Chartered Financial Planners and we strive to help our clients achieve their financial goals through careful financial planning.

If it’s time to perform a review of your financial arrangements please get in touch with Justin Rourke on 01768 222073 or email For more information on our Financial Planning and Wealth Management services that we offer, please visit our website.

Find out more about our Financial Planning & Wealth Management services

If you like this article and would like to subscribe to INSPIRED, our FREE monthly newsletter, then please click SUBSCRIBE.