The Retirement Trap: Don't leave your future to chance

11 June 2026

Retirement planning can seem daunting. It is not something that you can simply check off your to do list and be done with. As you move through life, your circumstances change, priorities change and even the rules change.

The impossible question is knowing when you are going to retire and how much you are going to need to maintain the standard of living you are aspiring for. In your early years, saving for retirement may not be a priority. There are many life events you may want to prioritise, such as buying a house, having children or exotic holidays. Most importantly is that you get the building blocks in place early. Time is just as important as the amount you save. Starting early allows for longer-term earnings potential and allows your investments to benefit from compound growth. This enables returns from dividends to be re-invested and generate further returns over time.

For some, the thought of putting savings into investments may completely go against their risk appetite. However, over time, inflation quietly erodes your purchasing power. Retirement planning should focus as much on bottom line growth as ensuring it keeps pace with living costs.

Being employed, saving into a pension can be fairly straightforward. You will be automatically enrolled into a workplace pension scheme. If you are self-employed, this can easily be forgotten or ignored. The good thing is that you can carry forward up to 3 years of unused contributions. A recent report by The Pensions Commission warned as many as 45% of working-age adults were not saving into a pension at all, despite nearly half of them being in work. The report also states that just 4% of wholly self-employed workers are saving for retirement, and it’s even lower among younger self-employed people.

Pensions are not the only vehicle you can use to plan for your retirement. An Individual Savings Account (ISA) is another tool you can use to start building a pot for retirement but without the complexities and providing greater flexibility. Whether to build up your ISA or your pension pot, of course, depends on your personal circumstances. A well-structured retirement plan may include a range of assets and tax wrappers which can provide greater flexibility when drawing income later in life.

Your objectives, time horizon and capacity for loss should be reflected in the level of risk you are be willing to take. Someone in their 30s should be able to take on a higher level of risk than someone in their 60s, who will be much closer to their planned retirement age. The longer your time horizon, the more you are able to allow for fluctuations in market cycles and withdraw yourself from reacting emotionally and abandoning your long-term objective.

The underlying asset allocation is often the biggest determinant of long-term outcomes. Diversification across equities, bonds, property and alternative assets can help balance growth opportunities.

The most important step is the first one. Reviewing your retirement plans today could make a significant difference to your financial future, giving you peace of mind that your savings are working hard for you. While retirement may seem a long way off, the decisions made today can have a meaningful impact on the choices and opportunities available to you in later life.

Simon Thompson Chartered FCSI
Investment Manager

If you would like to discuss the topics raised in this article in more detail, please contact Simon on 020 3100 8282 or simon.thompson@wcgplc.co.uk.


Important information

This article is intended to be Walker Crips Investment Management's own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this document constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN:226344) and is a member of the London Stock Exchange. Registered office: 128 Queen Victoria Street, London, EC4V 4BJ. Registered in England and Wales number 4774117.