Do you have a pension?
While the UK electorate and the government remain consumed by Brexit, there are arguably more pressing matters at hand for Theresa May and her Cabinet. Take the fact that Brits are failing to save for their retirement, for example, with the latest figures suggesting that 15 million people (or one-third) are currently failing to invest in their pension plans.
With the UK state pension nowhere near enough to sustain citizens, this is a serious issue that could be exacerbated if the British economy is adversely affected in the wake of Brexit.
The message here is that citizens should adopt a proactive approach to funding their retirement in the modern age, primarily by investing in a personal pension plan. This is particularly important in bustling city areas such as London, and here’s why:
The cost of living in London is extremely high
There’s no doubt that London as the highest and most disproportionate cost of living in the UK, particularly when you compare the cost of accommodation to average earnings.
This issue has recently been exacerbated by a soaring inflation rate and stagnant, real wage growth. Despite a recent decline in the price of food, 3 per cent and is well above the 2 per cent benchmark laid out by the Bank of England (BoE).
This makes it exceptionally difficult for Londoners to save or optimise their disposable income, which is why a private pension plan is pivotal for their futures. These issues also suggest that anyone living in the capital may want to consider seeking out a self-invested pension plan (SIPP) from providers such as Bestinvest, as this will expose them to a more diverse range of assets and potentially higher gains.
London is the most unequal area in Britain
Another issue facing London is the divide between the rich and the poor, with the capital home to some of the UK’s richest and poorest citizens in equal measure.
Incredibly, more than 20 per cent of the city’s households boast wealth in excess of £1 million, while almost exactly the same proportion have cumulative wealth of less than £20,000.
This type of divide can be damaging for society, as those on the wrong side have limited opportunities to boost their earnings or enter the lucrative property market. As a result, contributing regularly to a workplace or private pension plan can reap rewards in the future, and help in some way to bridge this growing fiscal chasm.
Buying property in London is prohibitive
Last year saw house prices in the capital decline by around 0.5 per cent, while experts are suggesting that we could see a similar decrease in 2018. While this may seem like good news, however, London remains home to some of the most expensive and disproportionately priced properties in the world, with many unable to save the requisite deposit to get their foot on the market.
This makes the cultivation of pension plan even more important, as this represents the type of viable financial asset that can deliver long-term fiscal security.
Without this or a piece of property to call your own, it can be exceptionally difficult to build any kind of sustainable wealth while residing in the capital.