Trustnet Magazine Issue 21 September 2016

/ MILLENNIALS / THE LONG GRASS Martin Bamford, chartered financial planner for Surrey-based Informed Choice, says competing financial priorities mean that for Millennials, saving for retirement is often kicked into the long grass. “Many in this age group feel financially stretched by daily living costs, repaying student debt and trying to get on to the property ladder. This tends to push pension contributions well down the list and can result in a poorer retirement.” TOO GOOD TO MISS The first hurdle in saving for retirement, he says, is not wanting to save, and that usually results from underestimating the consequences of failing to do so. “Millennials who find themselves financially stretched need to start by making a monthly budget and living within their means,” he said. “Putting something aside for the future is better than saving nothing at all. If your employer is offering to match contributions, then this is an opportunity too good to miss.” “I would encourage anyone in their 20s or 30s to start saving what they can for retirement and gradually increasing their savings Their smartphones, chai lattes and Instagram holiday snaps belie a hazardous truth: many are broke rate over time. The best time to boost your savings is when you get a pay rise or bonus, so always allocate a good portion of that to the future. Saving for retirement is about much more than pensions.” He also adds that the introduction of the Lifetime ISA next April is likely to be a better choice for Millennials who want a degree of flexibility in terms of earlier access to any money they have saved – for buying their first property, for example. TIME ON YOUR SIDE Adrian Lowcock, investment director at Architas, says the one asset Millennials have that other generations don’t is time, but also PERFORMANCE OF INDEX OVER 10YRS WITH AND WITHOUT REINVESTING DIVIDENDS 80% FTSE All Share (with dividends reinvested) (75.34%) 60% FTSE All Share (without dividends reinvested) (22.93%) 40% 20% 0% -20% Source: FE Analytics trustnetdirect.com Sep 16 Sep 15 Sep 14 Sep 13 Sep 12 Sep 11 Sep 10 Sep 09 Sep 08 Sep 07 Sep 06 -40% notes the lack of spare money to save towards a

Trustnet Magazine Issue 21 September 2016 | Page 15