Financial expert, Sarah Coles, on why a financial safety net matters
In retirement, the recommended minimum grows to 1-3 years’ worth of essential spending, because when you’re on a lower fixed income, and unable to make up any shortfall through earnings, you need much more wiggle room. This is particularly the case if you’re using drawdown to take an income from your pension, because you may not want to take as much from your pension when investments fall: this emergency fund can cover your needs in the interim.
Among those without savings to fall back on, the research shows around one in five will cover the cost from their income – and cut back elsewhere. The rest of us will borrow. One in ten people say they’re forced to dip into an overdraft to afford unexpected expenses, while one in 20 say they use payday loans. Both are horribly expensive, so it’s worth taking the time to find a more affordable alternative.
This can include credit cards or loans, but it’s worth shopping around to ensure you’re using the right one. At the moment, the average credit card rate is 20.29% - the highest on record, but if you have a good credit rating you don’t need to pay anything like this, and you may be able to get a card with a 0% period. The average loan, meanwhile, charges 7.79%, but scouring the market could get you a much better deal. Don’t aim too high though.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Mum left distraught after finding body during Jet2 holiday'I can't get the image out of my head. It all seemed to happen in slow motion'
Read more »
Molly Mae shares candid parenting moment on Caribbean holiday trip with BambiThe 24-year-old former Love Island star has jetted off to Barbados and been updating her social media followers with the cutest snaps of her little one she shares with partner Tommy Fury.
Read more »