People in the UK should put off splashing out on a new car so often in order to pour more cash into saving for the future, recommends a new report.
Research conducted by Fidelity International found that if people stuck with their car for an extra two years and diverted the average car loan payment of £352 into savings they would save an extra £238,674 over 30 years toward their retirement.
On the basis that they are invested at a compound rate of seven per cent per year and taking charges into account, even for those who gave in and bought a new car just a year later than usual would still save £142,268.
President for UK and Europe at Fidelity International Simon Fraser said: "Just by deferring a car purchase by a year or two, people can make a substantial improvement to their retirement prospects and, potentially, stop full-time work far earlier than those who embrace the 'spend now, save later' ethic.
"No one is saying that individuals should not spend their earnings, but there needs to be a balance between consumption now and saving for the future."To read more about pensions, click here.
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