The whole point of saving is to be able to enjoy your hard-earned cash at some point in the future on whatever takes your fancy. Well, apparently us Brits don’t seem to be doing that – quite the opposite in fact.
We tend to see capital as being “off limits” and income as being “available”. What we fail to remember is that all income and capital belong to us, and we are free to use it for whatever we want while we are still here. However, we continue to defer consumption of our savings through fear of the unknown – what will happen tomorrow? What if I need it?
Now there is obviously a case for saving. You want to be sure you are comfortable in retirement, and you shouldn’t go off the other end of the scale into extreme extravagance. Your priority may also be to provide for your family after you die, if you think they need it.
But what is stopping you from enjoying retirement while you are able and if you can afford to? And also, is it really sensible to save to a point where there are no further inheritance tax saving methods available to you, meaning much of your savings will be taxed at 40% when you die anyway?
As financial advisors, obviously we want to encourage you to save and protect your assets, but we also need to make sure you enjoy your savings as well, and that means spending them! Because at the end of the day, you earned it!