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.
Investment fund
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.
Was this article helpful?
YesNo
About the author
Ruby is a freelance writer who enjoys writing about all things personal finance. After embarking on her own side hustle journey three years ago, Ruby is passionate about helping others to learn about the ins and outs of persona… Read More
Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.
This post was originally published on Motley Fool
