The 'silly season' prompts stories which usually wouldn't see the light of day so IFAonline's Silly Season Shorts highlights the 'financial services news' hoping to catch the media eye.
And the tenuous links keep on coming.
Standard Life asks the question: “thinking about buying a new motor? Changing your car less often and diverting the savings into a pension plan could put you on the road to a more comfortable retirement.”
Apparently, with “the new ‘56’ registration due out in a matter of weeks, anyone intending to buy a new vehicle might want to be aware that putting off a visit to the dealership showroom for another year or so could have a big impact on his or her pension savings.”
Standard Life tells us someone who buys a new family car every three years could, over a lifetime of motoring, build up a pension fund of £28,879 in today’s money by keeping their car for an extra year. This would provide a pension of £2,052 a year for life for a male 65 or £1,896 a year for a woman aged 65.
Moreover, while moving from a three-year to a four-year ownership period would generate significant amounts towards a pension, the biggest winners by a mile would be those people who normally buy a new car every year.
One suspects those who can afford to buy a new car every year probably don’t have too much to worry about where their pension is concerned but Standard carries on regardless, telling us buying a new car every two years instead would, over a motoring lifetime of 30 years, generate enough savings to buy a pension for life of £9,660 a year for a man aged 65 or £9,000 a year for a woman aged 65.
And while keeping a car for longer would result in additional expenses, such as replacement parts, tyres and servicing, these costs have, the provider helpfully assures us, been factored into its analysis.
Furthermore, the research was based on the ownership of “the UK’s most popular car, the Ford Focus” (really?) and the potential savings for anyone running a more expensive car – such as an executive saloon or a large 4x4 - would be much greater.
John Lawson, head of pensions policy at Standard Life, suggests:
“Around 2.5 million new cars are registered in the UK every year and just under half of which are bought privately. We are not suggesting that people shouldn’t buy new cars but changing your car a little less regularly can generate big savings. These savings, over a lifetime of motoring, could be sufficient to help fund a comfortable retirement.
“With the new 56 registration plate due out in a matter of weeks, now is the time to consider whether the money you intended to spend on a new car would be better invested for the future.”
IFAonline will be seeking your views by the end of August to find out which of the 'silly season shorts' deserves a special award.IFAonline
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