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Following Warren Buffett could increase your chances of making a million

Following some of the worlds most successful investors can be a sound strategy to enhance your portfolio returns. After all, investors such as Warren Buffett have relatively simple strategies which can be replicated to a large extent by private investors.

Notably, the Sage of Omaha focuses on buying high-quality companies for a fair price. In doing so, he improves his investment odds through obtaining a margin of safety. Furthermore, he also invests only in companies that he fully understands. By following his lead in these two areas, it may be possible to boost your returns, while also reducing overall risk in the process.

Value investing

While value investing may appear to be little more than buying the cheapest companies around, in reality that is only part of it. Value is not only made up of a companys stock price, but also its quality. This can entail its track record of earnings growth, whether it has a distinct competitive advantage versus sector peers, as well as its potential to generate improving financial performance in future.

As such, a stock may be cheap, but could lack the quality required in order to make it a good value investment. Therefore, Warren Buffett has been known to prefer great stocks trading at fair prices, rather than fair companies trading at great prices. Through focusing on the strength of a business first, and seeking to only pay what its worth, an investor may be able to improve their chances of making a million.

Knowledge

No investor can be an expert in all fields. They cannot be expected to have the required level of knowledge in order to invest with confidence in every industry which features within the stock market. As a result, investors such as Warren Buffett focus only on sectors in which they believe their knowledge is sufficient to fully understand the risks and potential rewards. Although this means that they may miss out on golden opportunities elsewhere, over the long run it can improve their returns, as well as reduce their risks.

For private investors, this could mean that they select a handful of industries where they have some basic knowledge. They then may wish to research those specific industries, rather than following the general movements of the stock market, in order to generate a competitive advantage versus their fellow investors. In doing so, they may be able to unearth value investing opportunities which have been missed by the wider stock market.

Takeaway

Although all investors would like to buy a stock for less than its current market valuation, being willing to pay a fair price for a high-quality stock could be a means of improving your long-term returns. Likewise, focusing on a smaller number of sectors may provide the opportunity to gain greater insights into potential stock price performance. In the long run, this could enhance your chances of making a million.

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A high-growth stock I think has appetising prospects

2018 was a disappointing and volatile year for shares of the food delivery operator Just Eat (LSE: JE). But this year has brought fresh prospects for the stock which I believe deserves further due diligence.

Global growth

Just Eat, together with its subsidiaries, operates an online digital marketplace for takeaway food delivery. According to its interim results last July, orders via its smartphone app account for 54% of the total.

It serves approximately 25m customers and has over 100,000 local takeaway and restaurant partners in 12 countries, including the UK, Australia, New Zealand, Canada, Denmark, France, Ireland, Norway, Switzerland, Italy, Mexico, and Spain.

The group is a market leader in all these countries and Italy, Spain, and Mexico in particular have shown strong order growth. The revenue increase in Canada was a whopping227%, compared to 30% domestically. Yet half of the revenues and the majority of its operating profits come from its British operations. In other words, global online penetration is still in its infancy.

In July, the company raised its revenue guidance for 2018 to between 740m-770m and cited a robust performance.

Disruption in food-delivery market

Home-delivered restaurant food in the UK feeds an industry that is fast approaching 4bn and seeing double-digit annual growth. The shifting eating preferences of British consumers towards ease and convenience are fuelling this growth.

As a high-growth company, Just Eat does not pay a dividend. It aims to expand both the customer base and the number of its restaurant partners. The bulk of its partners are low -to-mid-priced independent restaurants and many pubs.

So what major competition does it face? Tech investors that have tasted success in the industry have been backing more recent start-ups like Deliveroo that now has an estimated valuation of over 2bn.

Uber, the ride-hailing giant that is likely to go public in the US during the year, is in potential talks to buy Deliveroo and already operates Uber Eats, a 6bn-a-year food delivery service that is furthering its global expansion in the food-delivery business.

Recent developments at JE

As well as competitive pressures, the company has also had some internal challenges to deal with. At the end of January, its CEO Peter Plumb suddenly resigned. Over the past year, Cat Rock Capital, a Connecticut-based US hedge fund and activist investor with a 2% stake in the company, has been criticising what it has called unambitious targets and flawed incentive schemes under Plumbs leadership.

The activist investor has asked for the sale of the 33% stake in Brazilian market leader iFood, worth some 650m, or about 13% Just Eats market capitalisation. Cat Rock wants JE to merge withanother food delivery group, a possibility cheered by many analysts and investors. The hedge fund has started a debate that will continue well into 2019 as management further clarifies its focus.

The bottom line

As the food-delivery industry matures, analyst consensus is that eventually there will be fewer companies, yet the growth trajectory for the leaders will be exceptional. Therefore, as a publicly-listed leader, I believe JE could have a place in the portfolio of investors who are looking for high-growth tech companies.

JEs 52-week price range has been 519p-906p. Id regard any future weakness in the share price as an opportunity for long-term investors to buy the stock. In four to five years, I expect patients investors to be rewarded.

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Attention income investors! 2 FTSE 100 dividend stocks to watch out for next week

Theres a flurry of FTSE 100 dividend shares updating the market next week. Here I look at two big-yielders set to make the headlines.

HSBC Holdings

Banking giantHSBC (LSE: HSBA) is slated to unveil full-year results on Tuesday, February 19. Its a stock that will be keenly watched as concerns over slowing emerging markets in Asia, territories responsible for the bulk of the firms profits, grow.

The London business certainly impressed last time out and declared in late October that profits in its far-flung territories continued to grow by double-digit percentages as lending to both private and commercial customers kept on surging.

It will be also worth looking out to see if the Footsie firm will be setting aside any more cash for more PPI-related claims, given the uptick in provisions some other banks have witnessed in recent months (HSBC has already incurred costs of almost three-and-a-half-billion pounds owing to the mis-selling scandal).City analysts predict a 3% earnings rise at HSBC in 2019 and this leaves it dealing on a dirt-cheap forward P/E ratio of 11.4 times. Thats a reading that could spur some healthy share price advances if next weeks financials do impress. Now could be a shrewd time to pile into the blue-chip bank and its stunning 6% dividend yields.

Barclays

Owing to the ongoing fears that Brexit is having on the domestic economy, though, its likely that Barclays (LSE: BARC) will command broader media attention when it unpackages its own financials for 2018 on Thursday, February 21.

With Britains planned European Union withdrawal date of March 29 drawing ever closer, and the possibility of a cataclysmic no-deal exit becoming ever larger, its no surprise to see Barclayss share price edging lower again in recent weeks. And additional losses could transpire following next weeks release.

Indeed, the risks to the FTSE 100s UK-focussed banks were laid bare by Royal Bank of Scotland chief executive Ross McEwan on Friday when he complained that political uncertainty around Brexit has gone on far too long and that our corporate clients are pausing before making financial decisions [which] is damaging the UK economy and will affect our income performance.

Barclays reported that third-quarter revenues had declined when it last updated investors, and I wouldnt be surprised to see that further slippage has occurred in the subsequent months. Whats more, like HSBC, it will be interesting to see if the bank is forced to stash away more capital to cover the PPI scandal, following the extra 400m it set aside during the first quarter of 2018.

Now, City analysts expect Barclays will record a 4% profits rise in 2019, a figure that leaves it dealing on a prospective P/E multiple of just 7.1 times. However, neither the firms dirt-cheap valuation nor its tasty 5.1% dividend yield arent enough to tempt me in, given the high chances of severe forecast downgrades, possibly as soon as last years results come out in the coming days. Its a share that investors need to avoid like the plague, in my opinion.

You Really Could Make A Million

Of course, picking the right shares and the strategy to be successful in the stock market isn’t easy. But you can get ahead of the herd by reading the Motley Fool’s FREE guide, “10 Steps To Making A Million In The Market”.

The Motley Fool’s experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide. Simply click here for your free copy.


Attention income investors! 2 FTSE 100 dividend stocks to watch out for next week

Theres a flurry of FTSE 100 dividend shares updating the market next week. Here I look at two big-yielders set to make the headlines.

HSBC Holdings

Banking giantHSBC (LSE: HSBA) is slated to unveil full-year results on Tuesday, February 19. Its a stock that will be keenly watched as concerns over slowing emerging markets in Asia, territories responsible for the bulk of the firms profits, grow.

The London business certainly impressed last time out and declared in late October that profits in its far-flung territories continued to grow by double-digit percentages as lending to both private and commercial customers kept on surging.

It will be also worth looking out to see if the Footsie firm will be setting aside any more cash for more PPI-related claims, given the uptick in provisions some other banks have witnessed in recent months (HSBC has already incurred costs of almost three-and-a-half-billion pounds owing to the mis-selling scandal).City analysts predict a 3% earnings rise at HSBC in 2019 and this leaves it dealing on a dirt-cheap forward P/E ratio of 11.4 times. Thats a reading that could spur some healthy share price advances if next weeks financials do impress. Now could be a shrewd time to pile into the blue-chip bank and its stunning 6% dividend yields.

Barclays

Owing to the ongoing fears that Brexit is having on the domestic economy, though, its likely that Barclays (LSE: BARC) will command broader media attention when it unpackages its own financials for 2018 on Thursday, February 21.

With Britains planned European Union withdrawal date of March 29 drawing ever closer, and the possibility of a cataclysmic no-deal exit becoming ever larger, its no surprise to see Barclayss share price edging lower again in recent weeks. And additional losses could transpire following next weeks release.

Indeed, the risks to the FTSE 100s UK-focussed banks were laid bare by Royal Bank of Scotland chief executive Ross McEwan on Friday when he complained that political uncertainty around Brexit has gone on far too long and that our corporate clients are pausing before making financial decisions [which] is damaging the UK economy and will affect our income performance.

Barclays reported that third-quarter revenues had declined when it last updated investors, and I wouldnt be surprised to see that further slippage has occurred in the subsequent months. Whats more, like HSBC, it will be interesting to see if the bank is forced to stash away more capital to cover the PPI scandal, following the extra 400m it set aside during the first quarter of 2018.

Now, City analysts expect Barclays will record a 4% profits rise in 2019, a figure that leaves it dealing on a prospective P/E multiple of just 7.1 times. However, neither the firms dirt-cheap valuation nor its tasty 5.1% dividend yield arent enough to tempt me in, given the high chances of severe forecast downgrades, possibly as soon as last years results come out in the coming days. Its a share that investors need to avoid like the plague, in my opinion.

You Really Could Make A Million

Of course, picking the right shares and the strategy to be successful in the stock market isn’t easy. But you can get ahead of the herd by reading the Motley Fool’s FREE guide, “10 Steps To Making A Million In The Market”.

The Motley Fool’s experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide. Simply click here for your free copy.


The FTSE 100 is soaring! This is what I think Warren Buffett would do right now

Having risen 7% since the start of the year, its clear the first six weeks of 2019 have been strong for the FTSE 100. After a challenging 2018, its been able to deliver a recovery thats seen it come within 650 points of its all-time high. Investor sentiment appears to be improving, and this could mean the index has upward momentum in the near term.

Of course, deciding what to do as an investor in such scenarios can be tough. With this in mind, heres how I think Warren Buffett might react to share price rises.

Market noise

Perhaps the most notable aspect of Buffetts investing style is his ability to ignore market noise. He doesnt seem to be at all interested in the opinions of other investors. Therefore, share price rises and falls that are based on sentiment changing dont appear to change his mind on a stock, or on its future investment potential.

Of course, thats not to say that Buffett doesnt use changes to investor sentiment to his advantage. In scenarios where theyve become overly optimistic, he may take the opportunity to become more cautious. After all, no bull market has ever continued in perpetuity. Likewise, falling share prices provide him with the chance to buy stocks on low valuations, with fearful investors leading to share prices which, in many cases, may offer margins of safety.

Outlook

The recent rise in the FTSE 100 is most likely due to changes in investor sentiment, since the outlook for the world economy hasnt evolved considerably in the last six weeks. There are still notable threats facing world economic growth. For example, the US/China trade war could increase in severity, while a rising US interest rate could hurt the performance of the world economy in future quarters. As such, the risk/reward opportunity for investors may have worsened, rather than improved, following the FTSE 100s recent rise.

Clearly, there continues to be a number of stocks within the index that could offer good value for money. Since the FTSE 100 has a dividend yield of over 4%, it appears to offer a margin of safety and may be able to generate high returns in the long run. Value investors such as Warren Buffett are therefore unlikely to find it too challenging to find high-quality stocks that offer wide margins of safety.

The key takeaway, though, is as the market rises, its investment appeal may decline. Paying a higher price for the same asset when it comes with the same level of risk as it did six weeks ago doesnt seem to be particularly appealing. As such, while investors may now be more bullish and it could still be a good time to buy shares, dips in the indexs price level could make it an even more compelling investment opportunity.

You Really Could Make A Million

Of course, picking the right shares and the strategy to be successful in the stock market isn’t easy. But you can get ahead of the herd by reading the Motley Fool’s FREE guide, “10 Steps To Making A Million In The Market”.

The Motley Fool’s experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide. Simply click here for your free copy.


Want to retire with £1 million? I think these 2 investment tips could make you a fortune

Would you like to create a seven-figure savings pot by the time you retire? Of course you would. By following the tips you could give yourself a great chance of doing just that.

Get investing ASAP

Its not impossible to create a big retirement nest egg, even if you find yourself late to the party. Living in the moment is a perfectly human trait when youre in your 20s (and for some, well into their 30s, too). And this often means spending your hard-earned cash immediately. Retirement seems a lifetime away and so worrying about your finances in old age can be punted into the long grass, right?

Well, yes and no. Of course this depends on how large a pension pot you are looking to live off in your autumn years.

If youve just turned 40 and have only just started thinking about investing for retirement its not too late to create a big cash pile. But if you want to create truly titanic returns, the sooner you get on it the better. The later you leave it, the more you will have to set aside each month for your investment pot to hit the magic one-million-pound mark. And many people stuck in this boat face having to save some truly mind-boggling amounts to hit millionaire status, sums which are either impractical without having to seriously compromise your living standards, or are just downright impossible.

Dont be too risky

We all love the idea of getting rich quick. And as investors, we love stories of how investing x amount into an asset 20 years ago would have made you super-rich in retirement, or even allowed you to hang up the work boots way ahead of schedule to Live the Life of Riley.

Weve all heard about the many millionaires Apple has created since its IPO in December 1980 when its shares sold at just $22 apiece. Dreamt of buying gold in August 2009, when the fallout of the Great Recession caused its value to double in less than two years to current record highs above $1,900 per ounce. The rapid rise of Bitcoin up until late 2017 showed how we remain seduced by the potential to make quick, easy, stratospheric gains.

But for most of us the practice of investing is a longer slog played over a number of years. The most successful stock market players realise this and dont make dangerous gambles with their money. For many, Bitcoin represented a great way to get rich fast and it indeed made many individuals incredibly wealthy. Try talking up the virtual currency to those who piled in at the top of the market in December 2017 and whose holdings have lost a shocking 80%+ of their value in that time, though!

Slow and steady usually wins the race. Just ask the growing number of millionaires that have made a fortune through stocks and shares ISAs alone (some 170 according to recent research fromHargreaves Lansdownversus just three in 2012). Armed with a level head and a decent level of research, its indeed possible to become a millionaire retiree.

Want To Boost Your Savings?

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The report is entirely free and available for download today, so if you’re interested in exiting the rat race and achieving financial independence, click here to download the report. What have you got to lose?


No savings at 50? Here’s a 3-step plan to sort it out!

So, youve hit 50 or flown past it. Welcome to the club!If you havent saved anything for retirement, as millions havent, my guess is that you want a few ideas about what to do about it.

First off, all is not lost. You are going to get the New State Pension when you reach the governments State Pension Age which, for you and me, is 67. Its not a fortune, standing today at around 8,546 per year, but its something to build on.

Step 1 A plan to save

I think you need to make a firm commitment to save as much money as you can every month between now and when you do retire. And Im not talking about saving what you feel you can afford each month on a piecemeal basis, Im talking about setting a figure and saving it month in and month out without fail. You need to prioritise your monthly saving and treat it like any other bill that MUST be paid.

My Foolish colleague Roland Head did a bit of researchrecently, which suggested that if you start at the age of 50, you need to save 3,183 per month to accumulate 1 million by the time you retire. To get to that monthly figure, he assumed an annual average rate of return of 7% from investing on the stock market with the money.

Saving more than 3,000 per month is a big ask. If that figure is too much of a stretch, you can ask yourself whether you need a cool 1 million to enjoy your retirement. For most people, I reckon a quarter of that amount would be a big financial boost in retirement on top of the New State Pension.

So, the clear message in the figures is that you need to save as much as you can, regularly and consistently, and starting as soon as possible.

Step 2 Financial judo

But where should you put it? There are ways you can apply financial judoto your retirement savings to make them work really hard, and my top idea is to join your employers Workplace Pension Schemeif you have access to one. Two strong benefits will flow from that. Your employer will typically help you save by adding between 3% and 10% of your annual salary ON TOP of what you pay into your pension yourself, and all the monthly contributions from you AND your employer will be free of tax. So that often means at least another 20% will be added to your pension fund that would otherwise have gone on tax.

If you cant get in a Workplace Pension Scheme, you can still reap the tax-free benefits by saving into a Personal Pension or a Self-Invested Personal Pension (SIPP). Pensions give you tax relief when the money goes in, but its taxed as income when you draw it out in retirement. You can reverse the tax-relief advantage by opening an Individual Savings Account (ISA), which allows all your gains to be tax-free, but theres no tax relief on the money you pay in.

Step 3 Invest

It almost goes without saying that I think youd be best off with a stocks and shares version of the ISA account. Watch out for my next article and Ill discuss the investments you could make within a SIPP or ISA account when you are 50 or over.

Want To Boost Your Savings?

Do you want to retire early and give up the rat race to enjoy the rest of your life? Of course you do, and to help you accomplish this goal, the Motley Fool has put together this free report titled “The Foolish Guide To Financial Independence”, which is packed full of wealth-creating tips as well as ideas for your money.

The report is entirely free and available for download today, so if you’re interested in exiting the rat race and achieving financial independence, click here to download the report. What have you got to lose?


2 top value FTSE 100 stocks I’d buy right now

Due to concerns about the impact Brexit might have on the UK economy, shares in some of the UKs biggest companies are currently changing hands for bargain-basement valuations.

Today, Im looking at two such FTSE 100 stocks and explaining why I would buy them at the current price.

Soaring growth

International Consolidated Airlines (LSE: IAG) will almost certainly suffer if the UK economy slumps post-Brexit. An economic crash will depress wages, which means consumers will have less money available to spend on things like holidays, so IAGs sales will fall.

That said, as a global airline business, IAGs customers come from all over the world, so even if the UK economy does crash, I think the groups international diversification will help it weather the storm.

The market doesnt seem to agree. Indeed, right now the stock appears to be pricing in a one-third decline in profits. Shares in the airline are dealing at a forward P/E ratio of 6.5, compared to the airline industry average of around 9.5.

I dont think the company deserves this valuation for two reasons. Firstly, because I believe its unlikely earnings will fall by 30% in the near term and, secondly, the company is one of the most profitable European airline groups. It reported an operating profit margin of 12% for 2017, against the industry average of less than 10%. A better-than-average profit margin usually deserves a premium valuation to the rest of the industry.

As well as its sector-leading profit margins and discount valuation, shares in IAG also support a dividend yield of 4.3%.

Considering all of the above, I think the stock is oversold, and patient investors could be well rewarded buying IAG today with a 4.3% dividend yield, investors will also be paid to wait for the recovery.

Long-term growth

Shares in travel business TUI Travel (LSE: TUI) are suffering from the same kind of negative investor sentiment. Unfortunately, the companys recent trading updates have done little to reassure investors that they should be investing in this business.

Still, as my Foolish colleague Peter Stephens recently pointed out, while Tuis near-term outlook might not be attracting investors to the stock, the companys long-term potential is more attractive.

As one of the biggest holiday and tour operators in Europe, Tui has unrivalled buying power and economies of scale, meaning it can offer discounts and experiences other holiday companies cannot. With this being the case, Im optimistic about the firms long term potential. Consumers will always be looking for holidays and holiday packages, which tells me that while the industry might have to navigate some choppy waters, over the long term, demand should only increase.

On that basis, I think the stocks current valuation of just seven times forward earnings offers a lovely opportunity to buy into this long term growth story. Only adding to the appeal is a dividend yield of 8.3%, which means that investors in Tui, just like those of IAG, will be paid to wait for the share price recovery.

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Should you swap your cash ISA for a stocks and shares ISA?

ISAs are a great way to build up tax-free savings. But many investors are unsure about the differences between cash ISAs and stocks and shares ISAs.

Today I want to explain why you can have both types of ISA, but why the stock market variety is likely to be a more effective way to build wealth.

Whats so good about ISAs?

Everyone aged 16 and over can put 20,000 into an ISA each year. These accounts are tax free, so youll never have to pay tax on interest, income or capital gains earned on this money.

As the name suggests, you can only put cash into a cash ISA. This money is protected by the Financial Services Compensation Scheme (FSCS) up to a maximum of 85,000.

However, the tax savings in cash ISAs are often fairly modest. At the time of writing, the best interest rate on an easy access cash ISA was about 1.45%. At that rate, youd need 68,965 in your ISA to receive interest of 1,000 in a year.

However, the governments personal savings allowance means that even in a taxable savings account, basic rate tax payers can earn up to 1,000 of interest tax-free each year. So unless you have a lot of cash saved, cash ISAs provided limited tax benefits at the moment.

Cash vs stocks and shares

Stocks and shares ISAs offer the same tax-free protection as cash ISAs, but because theyre investment accounts, the value of your money can rise and fall. Because of this, these accounts should be used for long-term investment only, in my view.

The real attraction of stocks and shares ISAs is that the tax benefits are potentially much greater. At the time of writing, the FTSE 100 offers a dividend yield of 4.4%. With the 68,965 I mentioned above, you could generate a cash income of about 2,750 each year.

Thats worth sheltering from tax. And over the long term, history suggests you would enjoy capital gains on top of your dividend income. The long-term average return from the UK stock market is about 8% each year. At this rate, the tax savings with a stocks and shares ISA could really mount up.

The good news is that you dont have to choose between a cash ISA and a stocks and shares ISA. You can pay into one account of each type every year, as long as your combined payments dont exceed the 20,000 limit.

Getting started with a stocks and shares ISA

A stocks and shares ISA is like a wrapper. You can put investments such shares, funds or government bonds inside the ISA, and any future returns they provide will be tax free.

I think the best way to get started is to open a stocks and shares ISA and then put a FTSE 100 tracker fund into it. Many allow you to save as little as 25 per month, so you dont need a lot of spare cash to get started.

Tracker funds are also usually the cheapest funds you can find, which is good news. Low fees mean you keep more of the profits.

As with all investing, the most important thing is to start as early as you can, so that your money has more time to work for you.

Want To Boost Your Savings?

Do you want to retire early and give up the rat race to enjoy the rest of your life? Of course you do, and to help you accomplish this goal, the Motley Fool has put together this free report titled “The Foolish Guide To Financial Independence”, which is packed full of wealth-creating tips as well as ideas for your money.

The report is entirely free and available for download today, so if you’re interested in exiting the rat race and achieving financial independence, click here to download the report. What have you got to lose?


Are you unable to claim the full State Pension? This is what I would do

Researching how much youll be able to claim under State Pension rules is a pretty gruesome exercise.

Because the Department for Work and Pensions (DWP) is constant toying with eligibility criteria, its tough to know exactly how much youll be receiving when you retire, or indeed when youll be able to actually claim the pension. No wonder, then, that swathes of the general public are in the dark over what support they can expect to get from the government upon retirement.

An uncertain outlook

The first port of call is to log onto the official State Pension website to ascertain the size of the benefit youll receive and when you can expect to receive it.

As I mentioned earlier, however, the government is constantly reviewing the pension age to ensure that the future financial assistance is both affordable and fair. So whats on the website today may not be there in just a couple of years time.

Theres numerous economic, political and demographic factors that could damage pension eligibility for millions of people, in terms of how much they can claim and when they can claim it. However, a rapidly-ageing population is the biggest problem facing the DWP bean counters responsible for calculating the State Pension. This is illustrated by Office for National Statistics estimates predicting that the number of UK citizens within the State Pension age bracket will leap a staggering 36% between 2017 and 2042 to some 16.4m individuals.

Take these steps to protect yourself

There are plenty of conditions affecting individual pensions eligibility as of today, but theres one criteria that all of us have to meet. In order to claim the full new State Pension of 8,546.20 per year youll need to have had at least 35 qualifying years of paying National Insurance contributions.

If you have 10 to 35 years of contributions you can expect to receive some benefit. Without at least a decade of qualifying years on your National Insurance record you can expect to receive diddly squat from the government. Theres a way to top up your credits though, for most people, this could prove an exceptionally-costly endeavour.

Lets say that you are entitled to the full State Pension after paying NICs for those required three-and-a-bit-decades. Thats good, but hardly great. Would the164.35 per week that the full State Pension currently provides allow you to pursue the sort of lifestyle you envisage by the time you come to retire? I doubt that, for many of us, this paltry sum would stretch far enough just to cover everyday expenses.

Whether or not youre entitled to claim the full benefit its critical that you take your destiny in your own hands. Whatever your age, you need to take steps to bolster your income to supplement the State Pension and avert pensioner poverty, and a great way to do this is by buying big-paying dividend stocks. A 10,000 investment inTaylor Wimpey for example,the biggest yielder on theFTSE 100 with a reading of 11%, would boost your annual income to the tune of 1,100. And theres plenty of other blue-chip shares that could make you a fortune now and in the years ahead.

Want To Boost Your Savings?

Do you want to retire early and give up the rat race to enjoy the rest of your life? Of course you do, and to help you accomplish this goal, the Motley Fool has put together this free report titled “The Foolish Guide To Financial Independence”, which is packed full of wealth-creating tips as well as ideas for your money.

The report is entirely free and available for download today, so if you’re interested in exiting the rat race and achieving financial independence, click here to download the report. What have you got to lose?


Femi Ogunshakin Managing Director
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