Retirement planning strategies for 2024

Many Britons are taking a DIY approach to retirement planning. While taking control of your future is commendable, navigating the UK pension landscape and current economic climate can be complex.

This is where a financial adviser can make all the difference. Why go it alone when you can access up-to-the-minute advice, guidance and products designed to help you maximise your retirement savings?

Here, Acumen’s Managing Director Angela Maher offers her top retirement planning strategies for 2024 to keep you on track.

Why strategic retirement planning matters in 2024

The current UK retirement planning landscape is somewhat of a mixed bag, offering some tangible opportunities but also presenting distinct challenges in light of recent economic trends. As ever, the situation is nuanced.

Slowing inflation

In terms of the positives, inflation reached the Bank of England’s 2% target in the year to May. This is a significant decrease from the 40-year high of 11.1% recorded in October 2022.

Ultimately, that should eventually ease cost-of-living pressures, which means pension pots won’t have to work quite as hard to cover living costs.

Rising wages

Furthermore, wages are currently rising faster than prices, with the latest figures from the Office for National Statistics (ONS) showing that average pay growth was 6% higher from February to April 2024, compared with the same period last year.

Theoretically, this means more money for workers to put towards their pension savings.

High interest rates

At the time of writing, the Bank of England had also chosen to hold interest rates at 5.25% – a 16-year-high. Good news for savers, but not so rosy for those with credit cards or loans to repay.

Not to mention the impact on mortgage renewals, with many households now locked into fixed deals hovering close to the 6% mark.

The current UK pension landscape

So what does the current UK pension landscape look like? Here’s a snapshot of major recent developments:

State Pension increase

April 2024 heralded several welcome changes. The State Pension increased by 8.5%, in line with wage inflation as part of the triple lock.

This takes the basic state pension to £8,814 a year and the new state pension to £11,502.

Lifetime Allowance abolished

The Lifetime Allowance was also abolished. This will come as good news for savers with larger pension pots.

However, the positivity will be tempered by the £268,275 cap now imposed on tax-free lump sums.

Pension balances recovering

Those nearing retirement will be all too aware that pension balances have taken a significant hit over the last few years.

In 2022, balances dipped by as much as 13%, with many top pension funds reporting the biggest fall in asset values for 20 years.

The lingering economic impact of COVID and the conflict in Ukraine were two defining factors.

Several years on and balances are still recovering. Again, this comes back to high inflation and elevated interest rates.

Raising interest rates makes borrowing more costly, reducing the value of company shares. Higher rates also push down the price of existing bonds, which pension funds tend to invest in.

A perfect storm indeed.

Attractive annuity rates

Much rides on the Bank of England cutting interest rates – whenever that might happen. In the meantime, one upshot of higher interest rates is that annuity rates have increased as a result.

After years in the doldrums, this (currently) makes annuities an attractive prospect once more. Not least for pensioners looking to lock in a guaranteed income to mitigate economic uncertainties and life’s twists and turns.

Key strategies for retirement planning

With all that in mind, we asked Acumen’s Managing Director Angela Maher for her top retirement strategies for 2024:

’Make the most of your life’

“No-one wants to run out of money in retirement but equally important is making sure your retirement allows you to make the most of your life,” says Angela.

“It might involve travel, a holiday home in Tuscany, helping your family financially, buying that sports car you always dreamed of – your own individual plan needs to be designed and built.

“Our specialist cashflow planning service alongside our tailored investment strategies can make all the difference to the choices you make, so don’t leave it to chance,” Angela adds.

Retirement planning strategies at Acumen

Strategic retirement planning is essential for a secure and enjoyable retirement. It’s a complicated process, with many variables to consider. Working with a financial adviser can be invaluable for making informed decisions.

Take the first step towards a worry-free future by scheduling a consultation with Acumen.

Our experts have extensive retirement planning experience and can help you develop a personalised strategy to help you achieve your retirement goals.

For more information or to access retirement planning advice, please contact us on 0151 520 4353 or email [email protected] to book your free consultation.