Here’s a brief look at how your spending and saving could affect you now and the decisions you might need to make in the future.
The demands on your finances will change over time. Your life changes, priorities shift and lifestyle can play a more important role. In turn, this will affect how you feel about saving and how you save. It could be a constant juggling act with what to do with your money.
Your lifestyle and quality of life
If your lifestyle is holding you back from saving in to your pension then it could have an impact on you later on. By not saving enough, your lifestyle now could affect how much you end up with in your pension.
Not having enough money saved could affect your ability to spend for a quality of life when you retire or stop working. When thinking about saving, think about the lifestyle you want in the future - even if it feels far off. If retirement is getting close, tailoring your spending to what you think you might get as an income is a good way to prepare. Not everyone will be able to afford the same lifestyle in retirement.
Flexibility in your saving
Getting on top of your spending to support your lifestyle gives you an opportunity to look at how much you save and when to save. Saving needn’t be inflexible, it’s able to adapt with you and your lifestyle as you look to prepare for what lies ahead.
Starting to save early on could give you a chance to reach the quality of life you want. But what happens as things change? Saving more when you can means your pension savings are able to adapt to the unexpected. If Coronavirus has taught us one thing – it’s that you never know what can happen to impact your finances.
If you can, saving more in the lead up to planned additional spending could reduce the need for any drastic spending decisions. And when you think about lifestyle and quality of life – saving more in the lead up to retirement could mean you’re able to work less or start to be more flexible around working.
It’s important to remain committed to your pension savings as things change for you. You will need to keep an eye on your pension limits along the way. With your pension, you’re also still invested. The value can go down as well as up and you might not get back what you put in.
The right financial advice
When it comes to plans for your money, whether it’s your house or pension savings, the right financial adviser is best placed to understand you and your money. Their knowledge of the market means you will get the right product.
As your life changes the proactive support they can give you will help you and your commitment to your savings and spending.
You can learn more in our article Why seek financial advice?