When Should You Start Saving For Retirement?
Your answer might depend on where you live.
Is there also a North/South divide when it comes to saving for retirement?
Rainy in the North, sunny in the South; that's what they say, isn't it? In terms of making provision for retirement, a map of the UK as described in a recent infographic from icount, as can be seen below, suggests a similar pattern.
Of those surveyed who thought they should start saving for retirement between the ages of 20 and 29, 55% were from across the south-east, east, Wales and the south-west, while 'up north' the average opting for the 20-29 age band was just 43%. This is not surprising, given the income demographics behind the oft-perceived north-south divide.
According to figures published by the Office for National Statistics, the UK average annual disposable income in 2008 was £14,872. However, there are considerable variances in average gross disposables household income (GDHI) between different geographical regions of the UK. GDHI in 2008 was higher in London, the south-east and part of the eastern region. In contrast, the west Midlands, the north-east, and parts of Wales recorded lower incomes.
"The main contribution to GDHI per head," notes the report, "comes from compensation of employees, so is strongly influenced by an areas productivity and labour market outcomes. GDHI per head is also influenced by sources of income apart from work, such as from property, pensions and social transfers."
Even taking into account the respective cost of living differences - especially in terms of buying or renting property - the north-south disparities remain and explain why the surveyed group reflected that division in deciding when was the best time to start saving for retirement.
Of course, it also depends on what kind of retirement you envisage having. There is no doubt that a lower income can affect your level of societal well being and the higher your annual income, the better quality of life you are likely to enjoy. Critically, two things remain clear:
1) The sooner you start saving, the better your pension package will be, over and above State Pension guarantees.
2) Your dreams of a relaxed and fulfilling lifestyle in your post-work years are more likely to be realised the longer you can supplement your savings.
Considering the above, it might be worth making hay while the sun shines!
From Visually.