Do not plan to rely on the state pension

The state pension will not be enough for your retirement

State pensions have long been relied upon by many in order to supplement their livelihood. The following argues why you may not be able to rely on the state pension in the future.

Have you ever thought about how much you might need to live on in retirement? If not then you should do. More than likely you won't have to pay for housing any longer as you may own your property by then. However, you've still got to eat, go out and about, pay for bills, maybe go on holidays and take up hobbies. Unfortunately all of this costs money.

Bury your head in the sand over your pension problems?

Many people don't want to or don't feel that they need to think about retirement. This is wrong. Regardless of your age you should be thinking about retirement. Many will argue that they are intending on putting money into their pension in later life when they are earning more. Unfortunately by this time (if it ever happens) you may have lost decades of compound interest.

The state pension isn't guaranteed 

Finally many may be preparing to rely on the state pension. This is a mistake in my opinion. The current state pension pays just under £120 per week. This works out at roughly £6,400 per year - hardly an amount to live a life of lavishness in your retirement. 

Added to the fact that the state pension isn't a lot is the question over its reliability. There is no guarantee that the state pension will continue to be paid out by the time you retire. Don't just assume you will be entitled to it. There is likely to be a pension crisis looming in the next few decades such that the government cannot afford to pay all retirees a pension. More than likely pensions will be means tested such that if you have any assets of value then you will be expected to sell those assets in order to qualify for the state pension. In order to protect yourself from such types of eventualities then you will need to build up your own pension pot. Rely on the state pension at your peril.

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