“There is an increasing trend that we are moving away from the historical nanny state and that puts more onus on individuals to ensure they are prepared for later life. The ONS stats show the proportion of people aged 85 years and over is projected to almost double of the next 25 years. Essentially, the baby boomers are getting older and not dying, and this trend will only continue so long as the NHS continues to provide the level of medical care it does today. Three things immediately jump out in regards to this statistic that are in urgent need of a rethink, or even reform. The cost of the state pension, the provision of social care and the funding of the NHS are all going to need to be suitable for generations to come, but each is woefully underfunded currently, in part because of the increases in life expectancy.
“Of those three, the complete lack of a social care policy and strategy is glaring. We urgently need action as we are already at a crisis point. As we are approaching a general election, it is going to crucial to see what provisions are made in this area in each of the party’s manifesto. We appear to be moving towards a structure where the state commits to pay for some and the public will have to self-fund the rest. However, each party needs to spell out their plans in black and white. Any repeat of the ‘dementia tax’ debacle could end up seeing a ‘Grey Rebellion’.
“As a result, the impetus to save for later life has never been greater. For many people working backward will probably deliver the most accurate picture of how much you need to save. So consider your financial goals, factor in how much you are able to save over the next few years and then work out a suitable retirement age. But if that level of saving is not realistic don’t let it put you off altogether. Getting into a savings habit is a step in the right direction.
"The best way to supercharge your savings is to start as early as possible and give your money more chance to grow. This is primarily because of ‘compound interest’; the snowball effect that occurs when interest is added to your savings or investments, giving you a bigger pot with which to earn more interest in the future, and so on. A good rule of thumb is to invest half your age as a percent of your salary as a minimum. So if you’re 30, invest 15% of your salary, if you’re 40 invest 20%.”