The power of planning – why it’s important and how to do it

Article Header
Kirsty Kerr

May 16, 2024

3 mins read

For the last three years, our annual Retirement Voice survey has asked more than 6,000 people how they feel about their finances, pensions and retirement plans. And for a third year in a row, the message is loud and clear: planning can transform how people feel about their finances, no matter the age and stage they're at. Here's why it's important.

1. Planners feel better now

Planning doesn’t just benefit you in the future; it can benefit you today, too. Our research found that people who plan are almost three times more likely to feel positive about their current financial situation compared to those who don’t. And, overall, planners are less stressed and worried about today’s financial pressures.

Between the rise of inflation, interest rates and the cost of living, many households have felt the pinch on their finances at some point in the last few years. And having a clear plan for your future could help you feel more in control and reduce some of that stress and anxiety.

2. It can benefit everyone

You might think the benefits of planning are reserved for the people who have a lot of income to plan with; after all, it’s easier to feel comfortable about your future when you know you can fund it. But when we looked at the benefits of planning on different household incomes, the results were positive all-round. 

Those with a total household income of less than £30,000, who had done a great deal of planning, were more than three times as likely to describe their financial situation as ‘comfortable’, compared to those who have done no planning.

And, when looking at the same income bracket, those who don’t plan are twice as likely to describe their financial situation as ‘difficult’. 

Across the board, the same trends also show among those with higher incomes. Although, as you’d expect, those who do a great deal of planning and have a household income of more than £100,000 are significantly more likely to say they feel comfortable with their situation.

3. Even a little goes a long way

Our research looked at people who had done no planning, a little planning and a great deal of planning. And even those who had only done a little planning saw great benefits.

They were more likely to feel positive about their current financial situation, felt more comfortable that they were saving enough for retirement and felt more confident about making financial decisions. So, if you’re finding the thought of making a plan a little overwhelming, doing something small could still be better than doing nothing at all.

How to start planning

Despite all the positives, 7 in 10 have done little (if any) planning for retirement. And one of the biggest barriers is that people just don’t know where to start. 

So, if you’re feeling motivated to start planning but don’t know where to begin, try our step-by-step guide. It breaks down planning for retirement into five simple steps, so you can start feeling more confident about your finances now and in the future.

The information here is based on our understanding in May 2024 and shouldn’t be taken as financial advice.

The value of investments can go down as well as up and you may get back less than was paid in.