[date-today format='F j, Y']

I still plan to retire at 65 and I’m banking on UK shares to get me there

By investing in UK shares I can retire at the time of my choosing, rather than letting the state decide on my behalf. That puts...
human hand holding plasma ball
Photo by Ramón Salinero

I don’t want the government to tell me when I can retire, and I reckon that by investing in UK shares I can take the decision into my own hands. I’m relying on the FTSE 100 and FTSE 250 to build the wealth I need to stop work at a time of my choosing.

The state pension age is now 66 for men and women, but from 2026 it will start rising to 67. Then it will rise again to 68, possibly from as early as 2037. It could ultimately climb past 70, to keep it affordable. I like my job but I’m not sure I want to work that long. Building a balanced portfolio of UK shares should mean I don’t have to.

I’ll decide when I retire, thank you

Anybody who believes the state will provide a decent standard of living in retirement is sadly deluded. It’s not going to happen. The UK already spends more than £100bn a year on the state pension, that’s an incredible 12% of total public spending and this proportion will rise as the population ages. Chancellor Rishi Sunak has already scrapped the triple lock once, and he is likely to do it again, in my view. So this is where UK shares come into it.

I’m self-employed, so it’s up to me to build retirement savings in my name. Nobody else is going to do it for me, sadly. I’m starting by building a balanced portfolio covering major markets such as the US and Europe, and sectors such as smaller companies. I don’t know enough about these markets to buy individual stocks, so I rely on low-cost exchange-traded funds (ETFs) and investment trusts to do the job for me. I do know a bit about UK shares, though.

There are three reason why I buy individual UK shares instead of funds.

They give me the opportunity to generate outperformance and beat the market.
Direct equities are more exciting because they can move rapidly (in either direction), and that keeps my interest levels high.
It’s challenging (in a good way)! I like examining UK shares and checking out their potential, then seeing what happens to my stock picks (and how good/bad my judgement is).

Here’s why I’m buying UK shares

Right now, I can see plenty of opportunities out there. I suspect we are on the cusp of a commodity boom, because of that awful war in Ukraine. Rio Tinto tempts me. So does Anglo-American. I feel the financials sector is ready for a comeback, and rising base rates should allow the likes of Barclays and Lloyds Banking Group to widen their net interest margins and boost profits.

UK shares pay some of the most generous dividends in the world. Just look at Vodafone, GlaxoSmithKline, Johnson Matthey, and BAE Systems to name just a few. I will reinvest my shareholder payouts for growth today, and draw them as income when I finally retire. That may be when I’m 65, it may be later. The important thing is that the decision is down to me.

The post I still plan to retire at 65 and I’m banking on UK shares to get me there appeared first on The Motley Fool UK.

Should you invest £1,000 in Rolls-Royce right now?

Before you consider Rolls-Royce, you’ll want to hear this.

Motley Fool UK’s Director of Investing Mark Rogers has just revealed what he believes could be the 6 best shares for investors to buy right now… and Rolls-Royce wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 shares that are currently better buys.

Click here for the full details

More reading

Worried about a stock market crash? Follow this one rule to protect yourself
UK house prices set to grow at a slower pace as supply picks up
Short interest in Compass Group shares declines by a massive 76% in less than 2 weeks
Why now (yes, now!) is the right time to start investing
Investing like Warren Buffett! A penny stock to buy as share prices slump

Harvey Jones doesn’t hold any of the shares mentioned in this article. The Motley Fool UK has recommended Barclays, GlaxoSmithKline, Lloyds Banking Group, and Vodafone. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.





© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Latest News