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The Independent
5 hours ago
- Business
- The Independent
How much you need in your pension to retire — and four things to help you reach that amount
Pensions are back in the spotlight after the government announced new measures to tackle the growing issue of people failing to have enough money when they retire. Liz Kendall, the work and pensions secretary, said on Monday that almost half of the working age population 'isn't saving anything for their retirement at all'. She has revived the pensions commission, which last met in 2006, in a bid to determine how best to help workers after experts warned that people looking to retire in 2050 are on course to receive £800 per year less than current pensioners. The scale of the issue cannot be underestimated. Rachel Vahey, head of public policy at AJ Bell, said the government's own analysis pointed to a 'dire need for intervention'. 'Retirees in 2050 are on course for 8 per cent less private pension income than those retiring today. While automatic enrolment has created 11 million new pension savers, many are saving the bare minimum,' she said. 'The demise of private sector defined benefit pensions and a levelling down of contribution rates by some private pension schemes have meant that, although there are more pension savers in the UK, they are not all saving enough.' To put that into perspective, the Retirement Living Standards says you need £14,400 a year for a single person or £22,400 for a couple, just to have a minimum comfort lifestyle. For 20 years of retirement, that's an outlay of £280,000 at the bare minimum. And, if you're targeting a comfortable retirement, that can rise to around £44,000 for a single person and £60,000 for a couple. So what can you do right now to ensure you're better off when you do retire? The Independent takes a look. A common complaint with pensions planning is that, with tough living conditions, many need money now – never mind years from now in retirement. So, as a starting point, check your employer contribution to your pension and what else they have on offer. The automatic enrolment scheme requires eight per cent overall to go towards your pension, with employers contributing three per cent at a minimum. However, many workplaces may offer a higher amount than that to match your own contribution – so they'll go up to to five per cent if you pay the same amount for example, but only as an opt-in option. As such, you should absolutely ask your workplace if that's the case and see what you need to do – this may just be signing a form or clicking a box online. Do check if it means you have a different pension provider, plan or any other changed details to ensure it suits you. On a £35,000 salary across five years with a firm, that extra two per cent is an additional £3,500 going towards your pension pot – without any change at all to your payslip. Changing your own contribution Also linked to the above is a change in your own contribution level. Yes, upping your pension contribution means less money going into your bank account immediately. But small sums which aren't so noticeable now might work out in your favour later on. On a £35,000 salary one per cent is less than £30 per month. Upping your contribution rate from 5 per cent to 6 per cent, for example, will only see you get a small amount less in your pay packet – you'd have National Insurance and tax taken off before it arrives in your bank account – but over a 40-year career, that's more than £14,000 extra going towards your pension. The perfect time to do this might be after you secure a new job, promotion or pay rise as you won't feel any hit from one month to the next. And, don't forget, that doesn't mean your pension total value goes up £14,000 – it means there's that amount extra going towards the investments which are in your pension fund. Over the long term, investments tend to outperform cash, so over that four decade period of time, you'd expect it to contribute to grow your total pension fund by more than that value. As you get older, you may find you have the financial ability to contribute more towards pensions without compromising your living standards; if so, it's certainly something you should consider, especially if you do not already invest separately. State pension, SIPPs and the self employed There's of course more you can do, depending on your circumstances, to ensure you're not left struggling when it comes to retirement. The first thing in the years before you hit state pension age is to check you don't have any gaps in your record. You can backpay National Insurance contributions to 'buy' those years, but do the sums first (or check with an advisor) to ensure it makes financial sense for you to do so. Typically, you'll need around three years of pension payments to reclaim that extra initial outlay. Additionally, you may well have pension plans outside of your workplace one. If so – such as a self-invested personal plan (SIPP), a Lifetime ISA or a personal pension which is managed for you – you can make contributions to these and receive an additional payment towards it in the form of tax relief at the same rate as you pay tax on your salary. Ideal times for this might be when you get a raise, earn a larger than usual commission, receive a bonus or sell some personal items. Last but not least, self-employed people are at extreme risk of a later-life shortfall. It is estimated more than 80 per cent of self-employed people do not save towards a pension at present. If that's you, this is what you need to know about changing that.
Yahoo
7 hours ago
- Automotive
- Yahoo
Trending tickers: The latest investor updates on Tesla, Opendoor, Block, BP and Ryanair
Tesla (TSLA) Shares in electric vehicle (EV) company Tesla (TSLA) were up 1.4% in pre-market trading on Monday morning, ahead of the release of its latest earnings this week. Tesla (TSLA) is due to release its second quarter results on Wednesday, along with Google-parent Alphabet (GOOG, GOOGL), as the first two of the "Magnificent 7" tech giants to report this earnings season. Shares in Tesla (TSLA) are down more than 18% year-to-date, as the stock has continued to come under pressure with sales falling amid backlash against CEO Elon Musk and increasing competition from rival EV makers. Read more: Markets calm as EU readies plan for no-deal trade scenario with US In figures released early in July, Tesla (TSLA) delivered 384,122 vehicles globally in the second quarter, a drop of 13.5% for the same period last year. Dan Coatsworth, investment analyst at AJ Bell (AJB.L), said: "Elon Musk has tested Tesla (TSLA) investors' patience over the past year, given his constant distractions and increasing involvement in politics. Tesla has found life a lot harder this year, with weaker sales at the start of 2025 amid fierce competition." "The company is looking to get back on track with a more affordable electric vehicle and recently launched a robotaxi service, so one would expect Musk to talk up the opportunities at the results and shake off accusations that he's been preoccupied with other things." Opendoor Technologies (OPEN) Shares in online real estate service Opendoor Technologies (OPEN) soared 188% last week and were up another 36% in pre-market trading on Monday morning. The surge in shares came after activist investor Eric Jackson said he could see the company hitting $82 (£60.95) per share. Retail traders have piled into the stock since Jackson, founder of EMJ Capital, posted his bull thesis for an Opendoor turnaround on X on 14 July. Read more: Oil prices steady as markets doubt crude sanctions on Russia Opendoor (OPEN) went public through a special purpose acquisition company (SPAC) in 2020, with shares hitting a high of $39.24 in February 2021 before falling to under $1 each. The latest retail rally, fueled by Jackson's thesis and speculative posts on the meme-stock Reddit forum r/WallStreetBets, has begun to push the company toward the $5 line that would lift it out of penny stock status. On Friday, the stock closed at $2.25 per share. Block Inc. (XYZ) Shares in Block (XYZ) were up more than 9% in pre-market trading on Monday morning, after it was announced that the fintech led by Twitter co-founder Jack Dorsey would be joining the S&P 500 (^GSPC). S&P Global announced on Friday that Block (XYZ) would replace energy company Hess Corporation (HES) in the US blue chip index effective prior to the opening of trading on Wednesday 23 July. Read more: Stocks that are trending today The changes come as energy company Chevron Corporation (CVX) closed its $53bn deal to buy rival Hess (HES). This came after an arbitration panel at the International Chamber of Commerce in Paris ruled on Friday that Chevron has the go-ahead to close its all-stock purchase of Hess (HES), shutting out rival major bidder ExxonMobil (XOM) and ending one of the biggest standoffs the oil and gas industry has seen in the last 50 years. BP (BP.L) On the London market, BP (BP.L) was in focus on Monday morning, after the oil major announced that it had appointed Albert Manifold as the company's new chair. Manifold, who was CEO of building materials company CRH (CRH) for a decade until December 2024, will join BP's (BP.L) board on 1 September as a non-executive director and chair-elect, before taking over as chair on 1 October. He will be taking over from Helge Lund, who was appointed BP's (BP.L) chair at the beginning of 2019. Stocks: Create your watchlist and portfolio Shares in BP (BP.L) were up less than 1% on Monday morning following the announcement and are trading just 2.4% in the green year-to-date, as the stock has come under pressure amid weak company performance and lower oil prices. Neil WIlson, UK investor strategist at Saxo Markets, said: "BP's (BP.L) revival is building some momentum. Two days after revealing it's selling its US onshore wind business, the oil giant has appointed a new chairman to replace much-maligned Helge Lund. He will be replaced by Albert Manifold, former chairman of building materials firm CRH (CRH) – which moved its main listing to the US from London. Perhaps BP is gearing up for some more radical shifts?" Ryanair ( Dublin-listed shares in Ryanair ( jumped 6% on Monday morning, after the budget airline reported that profits had more than doubled in the first quarter. In results released on Monday, Ryanair ( said that profit after tax came in at €820m (£709m) in the first quarter, up from €360m for the same period last year. The company said traffic also grew by 4% year-on-year to 58 million passengers in the first quarter at 21% higher fares. Read more: Why Apple, Amazon and other tech giants are considering bitcoin Mark Crouch, market analyst at eToro, said: "Ryanair's ( latest numbers leave little doubt, this airline is built differently. Profits more than doubled in the three months to June, and all this while tariff uncertainty lingers and Boeing delays continue to hold back fleet growth. Most carriers would kill for these kinds of 'problems'." "It's not just that Ryanair ( is outperforming a sector still facing turbulence, it's that it's doing so with a kind of swagger. Where others are weighed down by cost inflation, wavering passenger demand and operational chaos, Ryanair is flying straight through it. Fewer planes? No problem. Higher fares? Passengers still pile in." Read more: Stocks to watch this week: Tesla, Alphabet, Intel, Lloyds and JD Wetherspoon How to build passive income Jobs data increases odds on Bank of England interest rate cutError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
8 hours ago
- Automotive
- Yahoo
Trending tickers: The latest investor updates on Tesla, Opendoor, Block, BP and Ryanair
Tesla (TSLA) Shares in electric vehicle (EV) company Tesla (TSLA) were up 1.4% in pre-market trading on Monday morning, ahead of the release of its latest earnings this week. Tesla (TSLA) is due to release its second quarter results on Wednesday, along with Google-parent Alphabet (GOOG, GOOGL), as the first two of the "Magnificent 7" tech giants to report this earnings season. Shares in Tesla (TSLA) are down more than 18% year-to-date, as the stock has continued to come under pressure with sales falling amid backlash against CEO Elon Musk and increasing competition from rival EV makers. Read more: Markets calm as EU readies plan for no-deal trade scenario with US In figures released early in July, Tesla (TSLA) delivered 384,122 vehicles globally in the second quarter, a drop of 13.5% for the same period last year. Dan Coatsworth, investment analyst at AJ Bell (AJB.L), said: "Elon Musk has tested Tesla (TSLA) investors' patience over the past year, given his constant distractions and increasing involvement in politics. Tesla has found life a lot harder this year, with weaker sales at the start of 2025 amid fierce competition." "The company is looking to get back on track with a more affordable electric vehicle and recently launched a robotaxi service, so one would expect Musk to talk up the opportunities at the results and shake off accusations that he's been preoccupied with other things." Opendoor Technologies (OPEN) Shares in online real estate service Opendoor Technologies (OPEN) soared 188% last week and were up another 36% in pre-market trading on Monday morning. The surge in shares came after activist investor Eric Jackson said he could see the company hitting $82 (£60.95) per share. Retail traders have piled into the stock since Jackson, founder of EMJ Capital, posted his bull thesis for an Opendoor turnaround on X on 14 July. Read more: Oil prices steady as markets doubt crude sanctions on Russia Opendoor (OPEN) went public through a special purpose acquisition company (SPAC) in 2020, with shares hitting a high of $39.24 in February 2021 before falling to under $1 each. The latest retail rally, fueled by Jackson's thesis and speculative posts on the meme-stock Reddit forum r/WallStreetBets, has begun to push the company toward the $5 line that would lift it out of penny stock status. On Friday, the stock closed at $2.25 per share. Block Inc. (XYZ) Shares in Block (XYZ) were up more than 9% in pre-market trading on Monday morning, after it was announced that the fintech led by Twitter co-founder Jack Dorsey would be joining the S&P 500 (^GSPC). S&P Global announced on Friday that Block (XYZ) would replace energy company Hess Corporation (HES) in the US blue chip index effective prior to the opening of trading on Wednesday 23 July. Read more: Stocks that are trending today The changes come as energy company Chevron Corporation (CVX) closed its $53bn deal to buy rival Hess (HES). This came after an arbitration panel at the International Chamber of Commerce in Paris ruled on Friday that Chevron has the go-ahead to close its all-stock purchase of Hess (HES), shutting out rival major bidder ExxonMobil (XOM) and ending one of the biggest standoffs the oil and gas industry has seen in the last 50 years. BP (BP.L) On the London market, BP (BP.L) was in focus on Monday morning, after the oil major announced that it had appointed Albert Manifold as the company's new chair. Manifold, who was CEO of building materials company CRH (CRH) for a decade until December 2024, will join BP's (BP.L) board on 1 September as a non-executive director and chair-elect, before taking over as chair on 1 October. He will be taking over from Helge Lund, who was appointed BP's (BP.L) chair at the beginning of 2019. Stocks: Create your watchlist and portfolio Shares in BP (BP.L) were up less than 1% on Monday morning following the announcement and are trading just 2.4% in the green year-to-date, as the stock has come under pressure amid weak company performance and lower oil prices. Neil WIlson, UK investor strategist at Saxo Markets, said: "BP's (BP.L) revival is building some momentum. Two days after revealing it's selling its US onshore wind business, the oil giant has appointed a new chairman to replace much-maligned Helge Lund. He will be replaced by Albert Manifold, former chairman of building materials firm CRH (CRH) – which moved its main listing to the US from London. Perhaps BP is gearing up for some more radical shifts?" Ryanair ( Dublin-listed shares in Ryanair ( jumped 6% on Monday morning, after the budget airline reported that profits had more than doubled in the first quarter. In results released on Monday, Ryanair ( said that profit after tax came in at €820m (£709m) in the first quarter, up from €360m for the same period last year. The company said traffic also grew by 4% year-on-year to 58 million passengers in the first quarter at 21% higher fares. Read more: Why Apple, Amazon and other tech giants are considering bitcoin Mark Crouch, market analyst at eToro, said: "Ryanair's ( latest numbers leave little doubt, this airline is built differently. Profits more than doubled in the three months to June, and all this while tariff uncertainty lingers and Boeing delays continue to hold back fleet growth. Most carriers would kill for these kinds of 'problems'." "It's not just that Ryanair ( is outperforming a sector still facing turbulence, it's that it's doing so with a kind of swagger. Where others are weighed down by cost inflation, wavering passenger demand and operational chaos, Ryanair is flying straight through it. Fewer planes? No problem. Higher fares? Passengers still pile in." Read more: Stocks to watch this week: Tesla, Alphabet, Intel, Lloyds and JD Wetherspoon How to build passive income Jobs data increases odds on Bank of England interest rate cutSign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Are we willing to drop cash Isas and take more risks with our money?
Savers are missing out on financial rewards because the benefits of investing in stocks and shares are being drowned out by risk warnings, the chancellor says. This week Rachel Reeves said savers would be sent details of investment opportunities if they have money in low-interest accounts. And she won't completely rule out cutting the annual tax-free allowance of cash Individual Savings Accounts (Isas) to push people into stocks and shares Isas instead. But what are her chances of making the UK a nation of investors, rather than risk-averse savers? Experts say women are investing less than men, and have warned the chancellor that some of her ideas could backfire and put off potential new investors. 'Pink websites won't work' Cash savings accounts are steady and safe. The amount of interest varies between account providers, but it is clear how much the returns will be. They are popular when putting money aside for emergencies, or for holidays, a wedding or a car. By contrast, the value of investments in stocks and shares can go up and down, but with risk can come reward. Long-term investments can be lucrative, not only for individuals, but for the economy as a whole. Laura Suter, director of personal finance at investment platform AJ Bell, says Reeves and the finance sector should start by making investing more attractive to women. Having written reports on the Isa gender gap, she argues that, for too long, advertising about investing has been designed by men. Lisa Caplan, director at investment company Charles Stanley, agrees. "It's not about making your website pink. It's about using less jargon, competitive language, and masculine imagery," she says. "When clients who are women feel seen and understood, they will be more willing to trust their money to an adviser or even an investment platform. I think this is beginning to change." Jema Arnold is an investor, and works for UK shareholders' association ShareSoc. She wants investing to be part of general, honest conversation among friends, not private and hidden. "I go to a book club. I want investing to be like that," she says. She is joined in a London cafe by Laura Colucci, who is in her 40s, and Wendy Lanham, who is 71. All three are divorcees, who were forced to think about their relationships with money when their marriages ended. Mrs Arnold was with an investment banker for 17 years. "In many ways I was a traditional housewife," she says. Her now ex-wife had managed that side of the finances. "I'd switched off that part of my brain when raising a daughter. That was a mistake. I felt foolish. I had to switch it back on again fairly quickly." Mrs Colucci was the same. "There were investments in my name," she says. "It was a huge learning curve in one year, when I had to take control." Mrs Lanham put her money into savings accounts. Only later did she consider moving some into investments. But that was a path that all three initially found difficult to join. "People froze up and looked awkward when I talked about investing," says Mrs Arnold. Male domination Mrs Lanham says she joined a group which met to talk about investing. The membership was entirely male. "I bought myself a book called Investing for Idiots, went to a conference, and treated it like adult education," she says. "I did not know anything, but hung in there, and the organisation changed." Now, the trio are members of SIGnet – a network of investor groups that meet in different parts of the UK, or online. It is not-for-profit and covers different areas of interest. It has lots of female members. But they say the chancellor will have little hope of getting more people to invest without initially improving their understanding, especially if they are trying it for the first time. "There's no point telling people to go and run a marathon when they've never run before," says Mrs Colucci. Reeves told financial services and business bosses in her Mansion House speech this week that the "negative" narrative around savers investing money in stocks and shares needed to change. "For too long, we have presented investment in too negative a light, quick to warn people of the risks without giving proper weight to the benefits," she said. She announced new adverts, reminiscent of the "Tell Sid" campaign of the 1980s, which encouraged people to invest in the newly privatised British Gas. Targeted messages will also be sent by banks to people who have money in low-interest accounts. Mrs Suter, from AJ Bell, says this needs to go beyond a "token effort". "If it can get widespread coverage and enthusiasm, then it could make a difference," she says. Isa debate Carol Knight, chief executive of the Investing and Saving Alliance, says Reeves' ambition will be judged a success if more women, more people from ethnic minorities, and more people outside of London become investors. But Anna Bowes, savings expert at the Private Office, says the chancellor risks her plan backfiring by encouraging people to invest now when markets are jittery due to global uncertainty. That could lead to short-term losses. "This needs to be done very carefully or it could put off a generation of investors." And she stresses that forcing people to consider a stocks and shares Isa by reducing the amount that could be put tax-free into a cash Isa would be a huge mistake. Reeves has stepped back from immediately cutting the tax-free limit on cash Isas, following a backlash from banks and building societies. But she is still keen to shift some of the £300bn in these accounts to being invested in the UK and its companies, despite "differing views on the right approach". Any changes would have an impact on millions of people. Isas are incredibly popular - about 42% of UK adults have at least one. Stocks and shares Isas are less popular but more money is held in them overall - around £431bn, compared to £294bn in cash Isas. People with Isas are more likely to be older, with estimates suggesting about half of pensioners have one. And while more women have Isas overall, more men have the investment option, with women more likely to stick to the safety of cash. Many investment companies that sell stocks and shares Isas back a change, while banks and building societies who dominate the cash Isa market are against it. That debate is likely to pick up again as the chancellor's autumn Budget gets closer. What is an Isa and how might the rules change? Savers to be targeted with offers to invest in shares under new plans One in 10 have no savings, financial regulator says
BBC News
2 days ago
- Business
- BBC News
Are we willing to drop cash Isas and take more risks with our money?
Savers are missing out on financial rewards because the benefits of investing in stocks and shares are being drowned out by risk warnings, the chancellor week Rachel Reeves said savers would be sent details of investment opportunities if they have money in low-interest accounts. And she won't completely rule out cutting the annual tax-free allowance of cash Individual Savings Accounts (Isas) to push people into stocks and shares Isas instead. But what are her chances of making the UK a nation of investors, rather than risk-averse savers?Experts say women are investing less than men, and have warned the chancellor that some of her ideas could backfire and put off potential new investors. 'Pink websites won't work' Cash savings accounts are steady and safe. The amount of interest varies between account providers, but it is clear how much the returns will be. They are popular when putting money aside for emergencies, or for holidays, a wedding or a contrast, the value of investments in stocks and shares can go up and down, but with risk can come reward. Long-term investments can be lucrative, not only for individuals, but for the economy as a Suter, director of personal finance at investment platform AJ Bell, says Reeves and the finance sector should start by making investing more attractive to written reports on the Isa gender gap, she argues that, for too long, advertising about investing has been designed by men. Lisa Caplan, director at investment company Charles Stanley, agrees. "It's not about making your website pink. It's about using less jargon, competitive language, and masculine imagery," she says."When clients who are women feel seen and understood, they will be more willing to trust their money to an adviser or even an investment platform. I think this is beginning to change." Jema Arnold is an investor, and works for UK shareholders' association ShareSoc. She wants investing to be part of general, honest conversation among friends, not private and hidden. "I go to a book club. I want investing to be like that," she is joined in a London cafe by Laura Colucci, who is in her 40s, and Wendy Lanham, who is 71. All three are divorcees, who were forced to think about their relationships with money when their marriages Arnold was with an investment banker for 17 years. "In many ways I was a traditional housewife," she says. Her now ex-wife had managed that side of the finances."I'd switched off that part of my brain when raising a daughter. That was a mistake. I felt foolish. I had to switch it back on again fairly quickly."Mrs Colucci was the same. "There were investments in my name," she says. "It was a huge learning curve in one year, when I had to take control."Mrs Lanham put her money into savings accounts. Only later did she consider moving some into that was a path that all three initially found difficult to join."People froze up and looked awkward when I talked about investing," says Mrs Arnold. Male domination Mrs Lanham says she joined a group which met to talk about investing. The membership was entirely male. "I bought myself a book called Investing for Idiots, went to a conference, and treated it like adult education," she says. "I did not know anything, but hung in there, and the organisation changed."Now, the trio are members of SIGnet – a network of investor groups that meet in different parts of the UK, or online. It is not-for-profit and covers different areas of interest. It has lots of female they say the chancellor will have little hope of getting more people to invest without initially improving their understanding, especially if they are trying it for the first time."There's no point telling people to go and run a marathon when they've never run before," says Mrs Colucci. Reeves told financial services and business bosses in her Mansion House speech this week that the "negative" narrative around savers investing money in stocks and shares needed to change."For too long, we have presented investment in too negative a light, quick to warn people of the risks without giving proper weight to the benefits," she announced new adverts, reminiscent of the "Tell Sid" campaign of the 1980s, which encouraged people to invest in the newly privatised British messages will also be sent by banks to people who have money in low-interest Suter, from AJ Bell, says this needs to go beyond a "token effort"."If it can get widespread coverage and enthusiasm, then it could make a difference," she says. Isa debate Carol Knight, chief executive of the Investing and Saving Alliance, says Reeves' ambition will be judged a success if more women, more people from ethnic minorities, and more people outside of London become investors. But Anna Bowes, savings expert at the Private Office, says the chancellor risks her plan backfiring by encouraging people to invest now when markets are jittery due to global uncertainty. That could lead to short-term losses."This needs to be done very carefully or it could put off a generation of investors."And she stresses that forcing people to consider a stocks and shares Isa by reducing the amount that could be put tax-free into a cash Isa would be a huge mistake. Reeves has stepped back from immediately cutting the tax-free limit on cash Isas, following a backlash from banks and building she is still keen to shift some of the £300bn in these accounts to being invested in the UK and its companies, despite "differing views on the right approach".Any changes would have an impact on millions of people. Isas are incredibly popular - about 42% of UK adults have at least and shares Isas are less popular but more money is held in them overall - around £431bn, compared to £294bn in cash with Isas are more likely to be older, with estimates suggesting about half of pensioners have one. And while more women have Isas overall, more men have the investment option, with women more likely to stick to the safety of investment companies that sell stocks and shares Isas back a change, while banks and building societies who dominate the cash Isa market are against debate is likely to pick up again as the chancellor's autumn Budget gets closer.
