July 22: BEST FROM THE BLOGOSPHERE

July 22, 2024

Across the pond, cooling inflation has people saving for retirement again

Over in the United Kingdom, there are signs that inflation is starting to go into retreat – an increased number of folks are starting to save for retirement again.

Writing for Yahoo! Finance UK, Helen Morrissey reports that research from “Hargreaves Lansdown shows only 17 per cent of people said they had stopped or cut back pension contributions over the past six months. This is down from well over a fifth of people (22 per cent) who did the same thing this time last year.”

Translated – less people aren’t saving for retirement. That means more people are, the article explains.

“There are also signs that people are looking to rebuild their pensions (retirement savings) after these tough times, with seven per cent saying they had chosen to boost contributions over the past six months. A further two per cent said they had hiked contributions after previously cutting back,” the article continues.

While it’s good news that there has been a turnaround in retirement saving – generally amongst younger Brits – the article cautions that there is still more work to do on the savings file.

“The most recent Hargreaves Lansdown savings and resilience barometer which shows just 40 per cent of older households are on track for a moderate retirement income compared to 43 per cent of Generation X households,” the article reports.

What do you do if you have not been able to save for retirement during the inflation wave?

“If you have had to take the difficult decision to cut back, or even stop (saving for retirement) in recent years, then it’s important not to panic. Our budgets have taken a pounding as inflation has soared, leaving many needing to make tough financial decisions,” Morrissey writes. “Make a note to revisit your decision every six months, because restarting as soon as possible will help you make up any gaps more quickly,” she advises.

The article offers up some ways you can get your retirement savings going again.

“On an ongoing basis, there are small but important steps you can take to boost your contributions. Increasing them every time you get a new job or pay increase is one way of hiking how much goes in without being too painful,” writes Morrissey.

If your employer offers a retirement program where your contributions are matched by the employer, be sure to participate, as Morrissey notes that “the employer match and can mean a lot more goes into your pension overall without much extra necessarily needing to come from you. If it’s available to you it’s a great way of rebuilding your pension after a difficult time.”

One great thing about the Saskatchewan Pension Plan is that, unlike many employer-sponsored retirement savings programs, you decide how much to contribute – there is no mandatory contribution amount. If you have stopped contributing due to the high cost of living, you can resume contributions as inflation rolls back down. The choice of how often to contribute, and how much, is yours.

Find out how SPP can be your retirement savings partner – the plan has been helping Canadians build retirement security for more than 35 years.

Check out SPP today!

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Yahoo! Finance UK

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