- Inflation creates a ‘double whammy’ for retirement planning
- The best time to put money into your pension is now
- Selecting the right investment strategy makes a big difference to your living standards in retirement
Inflation is wreaking havoc on retirement planning because, as costs increase, it can be tempting to maintain your living standards and cut back on less pressing needs such as savings and pension contributions. In November 2022, a Bank of England survey found that higher-income households are especially likely to keep buying the same things even as they become more expensive and save less to compensate.
But the cost of retirement has also gone up, suggesting that we should be saving not less but more than before. For example, earlier this month Pensions and Lifetime Savings Association (PLSA) research suggested that a couple now needs £54,500 a year to fund a comfortable retirement – a 9.6 per cent increase on last year’s figure.