Covid-19 has put the brakes on travel plans for thousands of hopefuls across the UK. Gen Z has been feeling the strain in particular, with many 18-23-year-olds missing out on the opportunity to travel after education. As a result, overseas retirement has risen in popularity among this age group. In fact, research by Pensionbee suggests that 49% of Gen Z plan to use their side hustle to save for retirement.
Although side hustles can be a great way to make some extra cash, they’re not always the most practical solution. If you are too busy or simply don’t have the means to start a small business, here are three other ways to save for overseas retirement.
1. Invest your money
One of the easiest ways to grow your money without having to work a second job is to invest. Investing can grow your money through compounding interest, which accumulates over time and can lead to excellent gains. Even better, you don’t have to be a stock market pro to profit from investments.
Stocks and shares ISAs
A great way to get into the world of investing is to open a stocks and shares ISA. This is a savings account through which you can invest your money into various stocks and shares. It generates interest when the prices of your investments go up.
Anyone over the age of 18 can open a stocks and shares ISA. You can deposit up to £20,000 into your ISA per year. Stocks and shares ISAs often have higher interest rates than basic savings accounts, and they are a great way to save for the future.
Similar to stocks and shares ISAs, investment funds take your savings and make investment decisions for you. Therefore, they are ideal for investing beginners who want to build a good portfolio. Investment funds are often more niche than stocks and shares ISAs, which can give you a little more control over what you invest in.
2. Top up your workplace pension
Many people don’t realise that you can top up your workplace pension to increase your savings. Payments into these pensions are typically taken from your monthly wage automatically. As a result, many people assume that pension payments cannot be changed.
However, you are free to make extra payments into your workplace pension throughout the year. Furthermore, when you top up your workplace pension, your employer will often make extra payments too! You could use a savings calculator to work out how much you need to contribute each month in order to reach your savings goal.
3. Create a passive income stream
Passive income is a form of income that is acquired without doing any actual work. For example, authors make passive income every time their books are sold. They don’t actually stand in the shop and do the selling but they still make money from it. Therefore, passive income is ideal for people with little time on their hands!
There are many forms of passive income but most require either time or money to set up. The best passive income stream for those who have little time is a dividend portfolio. However, there are plenty of other ways to make money passively and save for retirement overseas.