Older savers issued warning over cash savings

Older savers have been advised on the best way to plan for their future by a financial expert. As life expectancy increases, the way in which people plan for and fund their twilight years is having to adapt too, with many people unaware of the most effective way to save.

Scott Gallacher, Director at Rowley Turton, said: "How much cash should you keep for retirement? Too many of us confuse the certainty of cash with safety. With inflation still stubbornly high and life expectancy meaning many of us will live well into our 80s, hoarding too much cash in our 50s or 60s could actually be dangerous.

He added: "Retirees often ask how much cash they should hold for security. I usually suggest keeping no more than 12 to 24 months of essential spending in cash to cover emergencies or market dips.

"Anything beyond that should be working harder, perhaps in investments that can keep pace with inflation.

“Holding too much cash feels safe, but it’s quietly losing value every day.

"Remember, this is your last chance to really take advantage of pensions and any employer contributions to maximise your retirement income, especially once the kids are off your hands and the mortgage is repaid, leaving more to put away."

The advice comes as recent calculations show that the minimum amount required for retirement in the UK has fallen due to lower energy prices and shifting expectations.

According to the Pensions and Lifetime Savings Association (PLSA),the cost of a minimum retirement living standard for a single-person household has dropped by £1,000 annually to £13,400 this year.

For a two-person household, it stands at £21,600, down from £22,400 the previous year.

The changes are primarily attributed to a significant decrease in energy costs and minor spending adjustments made to the living standard by research participants, the PLSA explained.

The minimum standard covers basic expenses, with some leftover funds for leisure activities.

Research discussion groups for the minimum standard reported minor changes in what they need for a minimum standard of living, including clothing, hairdressing, technology purchases, taxi use, and charitable donations.