UK named one of the WORST places to retire in Europe for people working right now | Personal Finance | Finance

With the percentage of pre-retirement earnings and social security retention both below 30 percent while ranking in the top half of the most expensive countries, the UK garnered its ranking as the third worst European country for millennial retirement. Investment and pension experts shared their insights on why the UK has ranked so poorly and what savers can do to improve their situation exclusively with Express.co.uk

The UK is looking increasingly unattractive for their retirement for the millennial generation – meaning those aged 25 to 40 – research from Our Life Plan has found.

Worryingly, The UK was rated worst in the ‘pension percentage or pre-retirement savings’ category in all of Europe with an abysmal 28.4 percent.

In comparison, Turkey ranked highest with 93.8 percent, which also ranked in the top three cheapest European countries.

The one category in which the UK excelled was life expectancy, which when taking into account the other poor ratings for retirement, is understandably worrying for young workers.

Ian Wright, founder of Our Life Plan, suggested several factors contribute to the the UK’s poor ranking.

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He said: “The UK has the lowest pension percentage of pre-retirement earnings at only 28.4 percent. 

“Also, one of the biggest problems in the UK is the high cost of apartments in both the city centres and outside of city centres. In fact, the country is in the top 12 of the countries with the highest average apartment costs from the ones that were analysed.” 

Currently, only Switzerland and Lithuania beat the UK for the worst places to retire in Europe, but what can savers and retirees do to enjoy their retirement to the fullest despite all fo this?

David Woodward, founder of Woodward Financials, said the negative outlook for millennial retirement didn’t come as a shock to him.

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He told Express.co.uk: “I’m not at all surprised that the United Kingdom comes out as one of the worst countries in Europe and you could go as far as one of the worst in the developed world.”

Mr Woodward said the millennial dilemma could be attributed to the ‘You Only Live Once’ attitude, which is sabotaging their retirement planning.

“The UK Government has tried to tackle the shortfall in millennial pension provision by extending the state retirement age to 68 years for now, who knows, will it hit 70 years of age? As well as introducing auto-enrolment to force employees into starting retirement provision earlier with the help of their employers.

“This is like placing a sticky plaster on the problem rather than tackling the root cause,” he concluded.

Chartered Financial Planner Kay Ingram warned the rising cost of living in the UK will become a detrimental problem for “Generation Rent”.

She said: “A higher cost of living leaves less surplus income to save and requires a bigger retirement pot to maintain an acceptable standard of retirement living.”

Ms Ingram said prioritising pension savings early in life is key to a comfortable retirement in modern circumstances: “For example, saving from age 25 will produce a pot 4.3 times as big as starting from age 55. Starting as early as possible will be key to a comfortable retirement for future generations.”

She added that auto enrolment for workplace pension should be “progressively increased” to open the starting age at 18 and apply to all earners, noting that young workers in the private sector have less of an opportunity to get a guaranteed pension. 

The tax-free and tax relief options for pension savings is also a welcomed bonus for savers, with Ms Ingram noting that using these legal systems of tax avoidance can help compound one’s savings. 

“Personal contributions to pension saving also reduce the individual’s taxable income for other purposes such as; qualification for tax free child benefit, the higher savings allowance of £1,000 per year, the threshold at which student loan repayments start and eligibility for the  personal allowance of £12,570 nil rate tax band.”

Mr Wright said that young people have several options to aid their retirement savings.

“Millennials can take action from a very young age, by avoiding overspending, saving money in an ISAs account or other investment methods like stocks, bonds, and rental properties to provide alternative income. 

“However, it’s important to understand that all investments imply a certain level of risk, so it’s always essential to seek professional individual advice before making any financial decision.”



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