Why you should ask yourself "can I afford a pet in retirement?"
75% of owners underestimate the costs involved in pet ownership. If you're planning on having a furry companion in retirement, make sure you've factored this into your retirement planning...
We are a nation of pet lovers.
Look around the office and you’ll see photo frames of our furry friends on desks. Meanwhile, social media accounts are full of pictures of the extended furry family.
It won’t be a surprise that the 2019 PDSA Animal Wellbeing Report reveals that 50% of UK adults are pet owners - that’s an estimated 10.9 million pet cats and 9.9 million pet dogs alone! Those that responded to their survey overwhelmingly said that owning a pet makes them happy. It’s amazing how much love and laughter a pet can bring into our lives and how much closer we become with each other because of them.
Many people will be hoping to maintain their lifestyle and standard of living in retirement. If you have a pet companion alongside you today, you will probably expect this to be the case in retirement too.
Paws for thought
But with the cost of pet ownership on the rise, have you have factored this into your retirement plans? Budgeting for a pet is a very important part of ownership, and many - 75% according to the PDSA - will underestimate the costs involved.
I am a huge dog fan and can definitely envisage a retirement with a dog at my side. The PDSA estimate that a medium sized dog will cost me between £6,500 and £17,000 over their lifetime. There is a huge amount of uncertainty when it comes to cost as, of course it will vary according to my dog’s size, breed, how long they live and their vet’s bills.
Looking at my own pension plan, luckily there’s a handy calculator I can use to estimate the effect of increasing my savings each month. Many pension providers now have a calculator and you can check your provider’s website for details. Alternatively there is a calculator available from the Money Advice Service.
Thinking back to the PDSA’s figures, increasing my projected fund to provide an additional £6,500 to fund my retirement pet companioncould cost me another 0.5% of my salary per year until I get to 65. It’s a wake up call for me that just owning one pet (let alone the 3-4 I’m likely to end up with) will cost me a lot more than I think.
Saving for a furry friend
If, like me, you are happily expecting your projected fund to be sufficient, you might want to think again.
The key to a comfortable retirement is planning and you can do this by regularly reviewing your pension plan(s). If you find you have a shortfall or aspirations for a certain lifestyle, the need for action is clear. Even if you are lucky enough to have your retirement savings broadly on track, you can still take steps to make it more certain that your pension plan will be able to achieve the income and lifestyle you want when you retire.
Most providers of defined contribution (DC) plans will have online tools and calculators to help you understand not just the value of your pension plan now, but what it is projected to be in the future. You can play with these projections, just as I have, to alter your selected retirement age and also the amount you are contributing.
Simply paying more into your pension plan is going to help increase your savings. For those in workplace pension schemes, some employers will increase their contribution if you increase yours. How you save and budget for the additional contribution is down to you – it could be as simple as cutting back on luxuries, such as the morning coffee on the commute or any other 'little luxuries'. Cutting back on some treats today could help with funding a pet in later life!
Source: Produced annually since 2011, the People’s Dispensary for Sick Animals (PDSA) Animal Wellbeing (PAW) Report, conducted in conjunction with leading research agency YouGov, is recognised as the most rigorous and in-depth assessment of the wellbeing of the nation's pets. Their 2019 report can be found here.