Boost Retirement Income with a Distribution Fund
MANY people have to rely on their savings to top up their income once they retire as only a small percentage have sufficient pension provision. Because the population in general is now living much longer, a great many people find themselves retired for 2 0 years or more and this means that any sort of inflation can take a serious toll on the buying power of savings.
The main point is that if you are taking an income from your savings you must be aware of the effect of inflation. A sobering thought is what you can "buy" with pounds 10,000 without your capital losing ground.
The best deposit accounts might get you 7.5 per cent gross, which is six per cent after tax. If you take off the rate of inflation, say around three per cent, this means that pounds 10,000 would generate actual "spending money" of just pounds 300 a year, which is less than pounds 1 a day!
Everyone should keep some money readily accessible on deposit for short-term needs, but to generate any worthwhile income you need to be looking for a combination of capital growth and a rising income. …