Latest news with #PensionInvestmentReview
Yahoo
3 days ago
- Business
- Yahoo
How far will your pension go as retirement costs go up
The cost of retirement continues to creep up, with the Pensions and Lifetime Savings Association (PLSA) recently putting the cost of a moderate retirement at £31,700 per year for a single person and £43,900 per year for a couple. This includes the state pension, but shows how much heavy lifting our workplace or personal pensions need to do to fill the gap. This is hardly going to buy you a luxury lifestyle either – a moderate lifestyle covers all your basics, plus some nice extras such as two weeks in Europe a year and the ability to run a car. If you want something more luxurious, this data shows your pension is going to need to work much harder: a comfortable lifestyle is said to cost £43,900 per year for a single person and £60,600 for a couple. Read more: What is the Pension Investment Review? Before you throw your hands up in despair, it's fair to say that while these figures provide a useful rule of thumb, they aren't hard and fast. Our own data from the HL Savings and Resilience Barometer put the costs slightly lower. A moderate retirement for a single person was pegged at £26,129 per year and a comfortable retirement at £41,829. The key thing is to think about what retirement means for you – is it lots of travelling or something more sedate? You may find that what you need differs massively from these figures. Once you've got an idea of what you want, you can start to put a figure on what that might cost. It's important to factor in all costs. The PLSA data assumes you own your home in retirement, and this is no longer the case for many people. So, if this is you, you will also need to factor mortgage or rental costs into your plan. You can then use online calculators to see if what you've got in your pension will get you where you need to be. Putting your data in an online calculator can show you what you are on track for in retirement. This will either give you the confidence of knowing you've got enough, or the time to put a plan in place if you haven't. Read more: Should people keep working until later in life? They can even be used to model the impact of boosting your contributions over time, so you can see how much small changes can help you move towards your retirement goal. Boosting contributions every time you get a pay rise can also make a big difference and it's also worth checking to see if your employer is willing to increase their contributions if you increase yours. This is known as an employer match and can play a big part in boosting your pension. The data shows that coupled up retirees have a slightly easier time of things than their single friends. This is because they share a lot of costs and will have the benefit of two state pensions and two workplace or personal pensions. This is a big help, but it's important not to rely too heavily on a partner's pension to see you through retirement. Relationships may not last and there's a worry that you could find yourself approaching retirement with very little. It's always important to make your own provision – even if you stay together having your own income will give you more control over how you spend your money in retirement. Read more: How getting ahead on your tax return can help cut your tax bill Why it's important to plan for retirement with your partner How to plan for retirement and track your pension pot income
Yahoo
4 days ago
- Business
- Yahoo
Will the UK spending review lead to autumn tax rises? Have your say
Chancellor Rachel Reeves is due to deliver the outcome of the UK government's spending review on Wednesday, 11 May, setting out departmental budgets for the next few years. The review will set out the day-to-day spending on public services, such as the NHS and schools, as well as planned areas of investment, including infrastructure and research. Health and defence are expected to be among the "winners" from Wednesday's spending review. In addition, the government said on Sunday that Reeves would unveil an £86bn boost for funding research and development in her announcement on Wednesday. Read more: Stocks to watch this week: TSMC, Adobe, Tesco, Bellway and Inditex However, the government faces a tough fiscal situation and the Institute for Fiscal Studies (IFS) warned last week that "sharp trade-offs are unavoidable". "A more generous NHS settlement, or going further and faster on defence spending, would make cuts to other public services even more likely," the think-tank said. "Within the category of 'unprotected' departments, larger increases for some areas – prisons, say, which face well-publicised challenges – would mean less (i.e. bigger cuts) for others." In a note on Friday, Ruth Gregory, deputy chief UK economist at Capital Economics, said that the spending review would "shine a light on the tight fiscal position. And Reeves' problems are far from over. U-turns on benefit spending and higher borrowing costs may mean to maintain the current buffer against her fiscal rules Reeves has to raise £18-46bn in the autumn budget." Gregory said in a separate note that those U-turns on benefit and welfare spending, along with increased pressure to ramp up defence spending and higher borrowing costs, had left Reeves in a "sticky position". "If she wishes to avoid a political backlash and/or an adverse reaction in the financial markets, she probably has little choice but to raise taxes in the autumn budget," Gregory said. In addition, Sarah Coles, head of personal finance at Hargreaves Lansdown, said: "If a potential funding gap emerges [from the spending review], there's going to be speculation that taxes could be hiked to close it. "The government very broadly has two options when it comes to fund raising from taxes. It could make a whole host of smaller tax tweaks – all of which could cause their own problems, or it could tackle a major tax, which would be politically risky." Do you think the spending review could open the door to tax rises being announced in the autumn budget? Vote in the poll below. Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers. Read more: How school fees can affect your mortgage borrowing The cost of caring for a loved one What is the Pension Investment Review?Error 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
4 days ago
- Business
- Yahoo
Will the UK spending review lead to autumn tax rises? Have your say
Chancellor Rachel Reeves is due to deliver the outcome of the UK government's spending review on Wednesday, 11 May, setting out departmental budgets for the next few years. The review will set out the day-to-day spending on public services, such as the NHS and schools, as well as planned areas of investment, including infrastructure and research. Health and defence are expected to be among the "winners" from Wednesday's spending review. In addition, the government said on Sunday that Reeves would unveil an £86bn boost for funding research and development in her announcement on Wednesday. Read more: Stocks to watch this week: TSMC, Adobe, Tesco, Bellway and Inditex However, the government faces a tough fiscal situation and the Institute for Fiscal Studies (IFS) warned last week that "sharp trade-offs are unavoidable". "A more generous NHS settlement, or going further and faster on defence spending, would make cuts to other public services even more likely," the think-tank said. "Within the category of 'unprotected' departments, larger increases for some areas – prisons, say, which face well-publicised challenges – would mean less (i.e. bigger cuts) for others." In a note on Friday, Ruth Gregory, deputy chief UK economist at Capital Economics, said that the spending review would "shine a light on the tight fiscal position. And Reeves' problems are far from over. U-turns on benefit spending and higher borrowing costs may mean to maintain the current buffer against her fiscal rules Reeves has to raise £18-46bn in the autumn budget." Gregory said in a separate note that those U-turns on benefit and welfare spending, along with increased pressure to ramp up defence spending and higher borrowing costs, had left Reeves in a "sticky position". "If she wishes to avoid a political backlash and/or an adverse reaction in the financial markets, she probably has little choice but to raise taxes in the autumn budget," Gregory said. In addition, Sarah Coles, head of personal finance at Hargreaves Lansdown, said: "If a potential funding gap emerges [from the spending review], there's going to be speculation that taxes could be hiked to close it. "The government very broadly has two options when it comes to fund raising from taxes. It could make a whole host of smaller tax tweaks – all of which could cause their own problems, or it could tackle a major tax, which would be politically risky." Do you think the spending review could open the door to tax rises being announced in the autumn budget? Vote in the poll below. Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers. Read more: How school fees can affect your mortgage borrowing The cost of caring for a loved one What is the Pension Investment Review?
Yahoo
4 days ago
- Business
- Yahoo
Will the UK spending review lead to autumn tax rises? Have your say
Chancellor Rachel Reeves is due to deliver the outcome of the UK government's spending review on Wednesday, 11 May, setting out departmental budgets for the next few years. The review will set out the day-to-day spending on public services, such as the NHS and schools, as well as planned areas of investment, including infrastructure and research. Health and defence are expected to be among the "winners" from Wednesday's spending review. In addition, the government said on Sunday that Reeves would unveil an £86bn boost for funding research and development in her announcement on Wednesday. Read more: Stocks to watch this week: TSMC, Adobe, Tesco, Bellway and Inditex However, the government faces a tough fiscal situation and the Institute for Fiscal Studies (IFS) warned last week that "sharp trade-offs are unavoidable". "A more generous NHS settlement, or going further and faster on defence spending, would make cuts to other public services even more likely," the think-tank said. "Within the category of 'unprotected' departments, larger increases for some areas – prisons, say, which face well-publicised challenges – would mean less (i.e. bigger cuts) for others." In a note on Friday, Ruth Gregory, deputy chief UK economist at Capital Economics, said that the spending review would "shine a light on the tight fiscal position. And Reeves' problems are far from over. U-turns on benefit spending and higher borrowing costs may mean to maintain the current buffer against her fiscal rules Reeves has to raise £18-46bn in the autumn budget." Gregory said in a separate note that those U-turns on benefit and welfare spending, along with increased pressure to ramp up defence spending and higher borrowing costs, had left Reeves in a "sticky position". "If she wishes to avoid a political backlash and/or an adverse reaction in the financial markets, she probably has little choice but to raise taxes in the autumn budget," Gregory said. In addition, Sarah Coles, head of personal finance at Hargreaves Lansdown, said: "If a potential funding gap emerges [from the spending review], there's going to be speculation that taxes could be hiked to close it. "The government very broadly has two options when it comes to fund raising from taxes. It could make a whole host of smaller tax tweaks – all of which could cause their own problems, or it could tackle a major tax, which would be politically risky." Do you think the spending review could open the door to tax rises being announced in the autumn budget? Vote in the poll below. Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers. Read more: How school fees can affect your mortgage borrowing The cost of caring for a loved one What is the Pension Investment Review?Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
04-06-2025
- Business
- Yahoo
How next week's spending review could impact your finances
As the government's spending review looms large on the economic horizon next week, speculation about what is set to change is ramping up. Experts from the Institute for Fiscal Studies (IFS) have already said "unavoidable" tough choices are inevitable on 11 June, but it remains to be seen how those might affect the man on the street. The IFS's evaluation, released at the weekend, showed the level of spending on health would dictate whether cuts were made to "unprotected" areas — those outside the NHS, defence and schools. The conversation this week has heavily centred on an incoming increase in defence spending, with prime minister Keir Starmer outlining plans to invest in 12 new military submarines. While many uttered a sigh of relief at the announcement the government would look to revisit its winter fuel allowance decision, general anxiety is setting in about the possible impact of more tax rises, as the government works out what else can be cut or tweaked to fund its plans. Read more: What is the Pension Investment Review? Heavily debated taxes, such as rules around gifting and inheritance tax, could be in the crosshairs. The option of freezing income tax thresholds is also a possible change. "Even though the path looks precarious, the chancellor [Rachel Reeves] remains committed to maintaining stability and prudence with borrowing to avoid a bond market strop out," said Susannah Streeter, head of money and markets, Hargreaves Lansdown. "So, given big cuts [...] would be politically difficult, it is not surprising given the choices in the spending review that speculation is mounting about potential tax rises in the autumn." Rules around workplace pensions and the future of salary sacrifice to save on taxes could be on the block. "This would cut the tax-efficiency of these schemes, which runs the risk of persuading employers to make their pension offering less generous," said Helen Morrissey, Yahoo Finance UK columnist and head of retirement analysis, Hargreaves Lansdown. Read more: Bank of England governor expects interest rates and pay to decrease this year "There has also been discussion about the reinstatement of a pension lifetime allowance, which risks undermining people's confidence and encourage them to pause contributions." As well as the threat of thorny pension tax changes, there are questions around further alterations to dividend tax. "Investors have already seen horrible cuts in the dividend allowance and higher rates introduced, so it would be adding insult to injury," said Sarah Coles, Yahoo Finance UK columnist and head of personal finance, Hargreaves Lansdown. "Given how attractive the UK market is for investors seeking dividends, it would be counter-intuitive to make dividend investing less rewarding given that the government is keen to encourage investment in the UK." Despite the seemingly difficult choices Rachel Reeves faces, there could be one potential saving grace in moving the goalposts, added Streeter. "There is a chance that Reeves might tweak her fiscal reporting rules, as suggested by the International Monetary Fund," she said. "This has the potential to give the chancellor a bit more wiggle room as the government might not be forced to make such frequent spending changes in reaction to changes to the economic outlook, which as we know is currently in a state of flux due to the unpredictability of US trade policy." Read more: Best cash-saving deals to beat inflation UK mortgage approvals drop for third month in a row UK house prices rise in May as higher wages, low unemployment boost marketError 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
