Alternative saving options for a comfortable retirement

As the Government announces large sign-up charges for their new NEST pension plan, what alternative savings options are on the market to help prepare for a comfortable retirement? The National Employment Savings Trust (NEST) first came into being in 2005, as a means to offer an occupational retirement scheme to more than 10m employees who were not already signed up to a pension plan. With the product due to be launched in 2012, the finer financial details are now coming into the public domain, including designs to incorporate an initial contribution fee of 2% for all new participants.

The fee has been instigated as a means to cover the financial costs of set-up, ensuring that the bill doesn’t fall into the tax-payers lap; however financial commentators have suggested that it will transform this into one of the most expensive pension options on the market today, especially for late stage, short-term savers who join in the first few years.

With the base rate remaining low, spelling small returns for ordinary savers, what are the economically viable alternatives to saving for a comfortable retirement?

High Interest Savings Accounts
Opened and managed alongside your current account, a high interest savings account offers a safe option for consumers who can make regular monthly payments for a fixed period. Interest and withdrawals will be paid and limited, respectively, to a single annual arrangement, but if you’re happy to sit on the nest egg, rather than fuss with it, these accounts can offer pretty good returns – savers can currently secure in excess of 4.5% AER. Offshore savings are also worth investigating as a high interest savings option.

Cash ISA
The start of the new financial year has signalled a mad scramble for ISA products, with many banks and building societies staying open over Easter to accommodate customers. Despite recent watchdog revelations in the media about low paying ISA’s, there are still a few choice products on the market that offer up to 5% return – plus they’re tax free.

Savings Bonds
Offering the option for savers to lock away a lump sum for a fixed period and fixed rate, Savings Bonds represent a relatively safe option for people who already have something to invest. The risk here is that whilst the cash is locked away interest rates begin to climb, yet your returns are fixed. The best options currently on the market are a little off the beaten track, so shop around for more unusual providers who may be able to offer a better rate of return.

Should I Start Taking My Pension More Seriously?

Recent developments and accompanying research about the finance industry should be set to make many UK adults start thinking about their pensions more seriously, and whether we have the necessary savings plans in place for our future. Of course, it is difficult to face up to the importance of storing money away at a time when many of us are cutting back and still finding it difficult to afford the bare necessities. Yet, now may well be the most logical time to do so.

Perhaps the most alarming research published recently (August 2009) is that by Prudential (UK). According to the retirement specialists, nearly a third of Britain's 8.8 million active occupational pension scheme members are unaware of how their retirement money is invested, with over a quarter (2.5 million) never reviewing how well the pension is working.

This research caused The Independent's Simon Read to refer to the state as 'inertia' at independent.co.uk. He stated: "Even more alarming is the fact that almost half of workers aged 25-plus have their money invested in the "default" fund of their company pension scheme."

At first glance, the data and Read's response highlight a glaring and significant issue. Whilst most adults are willing to take their time ensuring they are getting the best savings rates, the cheapest car insurance, or the killer 2 for 1s at the supermarket - they don't seem to care about their pensions as much. If they haven't got one, then it is always something to be done, but something that can wait. After all, retirement is a long way off. Additionally, if you start working at a new company and they mention that there is a pension scheme in place, this is seen as something of a bonus - and little more.

Of course, leaving you pension scheme to a company default plan is never likely to be the absolute best for your money, especially at a time when the market is particularly changeable. However, Read's response also had an impact on me, reading the research as a 25 year old. Do I ever even consider that it might be worth sorting out a pension plan? Certainly not. But, perhaps more needs to be done in order to educate people about their pension opportunities, and when they should start to pay into one. And like the recession has done for savings, insurance and 2 for 1s - maybe we will start to really think about pensions also.

Paul Roberts writes about pensions, finance, savings accounts and best savings rates.

10 tips to a budget-friendly wedding

While you want your wedding to be one of the most memorable days of your life, you don’t want to spend the rest of the marriage paying for it.

If you’re planning on walking up the aisle anytime soon, follow this no-fuss guide to savings and start your married life stress-free. First things first...

...Work out a budget (and stick to it!)

When it comes to tying the knot, the only thing you really need to pay for is the marriage licence - everything else is up for discussion.

Sit down with your husband or wife-to-be and think about what you both want from the day. How do you want it to look? What feel are you going for? Keep in mind how much you want to spend and how much you can realistically afford.

Remember, the tiny (and costly) details that can seem so important often go unnoticed by guests. It’s the overall atmosphere that you’re looking to achieve. Use the internet to gauge a rough idea of costs, and once you’ve arrived at a budget - stick to it!

Top 10 tips to a budget-friendly wedding

1) Maximise your savings

The first thing you’ll want to do is free up as much cash as possible to pay for the wedding. You could be wasting hundreds of pounds a year by paying too much for certain services.

For example, do you have the right savings account? Switching to a higher-interest account will earn you more on your savings, making it quicker to reach your wedding budget.

Less accessible but with generally better interest is a cash ISA account. Other ways you could free up cash to turn into savings include changing to a lower-interest credit card, switching gas and electricity supplier, replacing an expensive loan with a cheaper one, or saving money on home insurance, car insurance or life insurance.

All these potential extra savings could go towards your big day or honeymoon.

2) Prune the guest list

Look at the guest list. Don’t feel you have to invite anyone you haven’t spoken to in years or give singletons a plus one.

3) Bag a bargain dress

Keep an eye out for wedding and bridesmaid dresses on the high street or online. Discount sales can prove fruitful and as the wedding dress will only be worn once, you could even look at renting a second hand number.

4) Tie the knot on a cheap date

Carefully consider the wedding date. Does it really have to be on a Saturday at the height of summer? Winter months, weeknights and Fridays or Sundays can work out a lot cheaper.

5) DIY invitations

If you’re a whizz on the computer or have a talent for calligraphy, why not make your own invitations? The DIY route could save you a bundle.

6) Use your friends

Do you know someone who’s an amazing cook, photographer or DJ? If so, ask if they’d like to be a vital part of your special day. They may do it for love, or at least give you mate’s rates.

7) Flowers of romance

Buy flowers that are in season to help keep costs down. Maybe decorate the church with candles rather than flowers – a much cheaper option.

8) Get me to the church on time

Cars are another budget-busting cost. If you have a friend with a grand set of wheels, ask if they’ll do the honours.

9) Food and drink

This is the biggest cost of a wedding. A buffet can be more budget-friendly, and as for the bubbly, Cava makes a cheap and tasty alternative to Champagne. Serve it later in the evening and no one will know the difference!

10) The honeymoon

Honeymoons can be seriously expensive. These days, the most competitive deals can be found online, so get trawling for the best honeymoon packages. And don’t forget to get your travel insurance online as well – likely to be much cheaper than if bought on the high street.

What is financial planning?

Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, a company creates a Financial Plan immediately after the vision and objectives have been set. The financial plan describes each of the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the timeframes involved.

The Financial Planning activity involves the following tasks;-

• Assess the business environment
• Confirm the business vision and objectives
• Identify the types of resources needed to achieve these objectives
• Quantify the amount of resource (labor, equipment, materials)
• Calculate the total cost of each type of resource
• Summarize the costs to create a budget
• Identify any risks and issues with the budget set

Performing Financial Planning is critical to the success of any organization. It provides the Business Plan with rigor, by confirming that the objectives set are achievable from a financial point of view. It also helps the CEO to set financial targets for the organization, and reward staff for meeting objectives within the budget set.

Why is financial planning important?

Financial planning is not the same as financial advice. It is not a recommendation to purchase a particular product but an evolving action plan, regularly reviewed to ensure that your goals are met.


The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan on how you can meet your goals given your current and projected situation.

In practice this strategy will utilise available tax allowances, target liquid assets into appropriate vehicles, ensure your investments are structured correctly and managed professionally. Having created a plan you will be able to understand how each decision you make affects other areas of your finances and you can consider the short and long term effects on your goals. You can also adapt more easily to life changes and feel more secure that your goals are on track.

However, the true objective of financial planning is to ensure that this strategy is not neglected and its value is not diminished. Only through regular reviews can you ensure that you remain on track to meet your goals and maximise new ideas and opportunities.