Friday, November 10, 2006
Category:
Consolidation
The latest research from Fidelity International shows that those collecting their A level results in 1998 could have already saved £6,400 towards retirement.
Putting just £1.65 a day into retirement savings, less than the cost of a pint of cider, could expect to grow to £50,000 at retirement. This is based on a 25 year old wanting to retire at 60 investing £6,400.
Financial planning is vitally important for today’s undergraduates. The new academic year will see a new FSA backed scheme rolling out to seventeen universities across the UK with the aim to help students better manage their money. Education sessions on confronting debts, controlling money and planning for the future are features of the scheme.
Simon Fraser, president of institutional business at Fidelity International, said ‘Financial planning has never been so critical as when students leave school and embark on their adult lives. While their own retirement will seem like a lifetime away, the earlier students start to save the better. Our research shows the potential value of every pound invested diminishes rapidly as an individual gets older. For example, one pound invested in a pension at age 25 may already have lost as much as half its potential value if the individual waits until they are 39 to contribute.’
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Graduates who left university several years ago, and have built up multiple debts including student loans, credit cards and store cards might find that consolidating their debts with a
secured homeowner loan could lower their monthly outgoings thus freeing up some money to put towards retirement savings. Nevertheless it should be remembered that repaying borrowing over a longer term increases overall interest charges.
