Adopt an Amazonian approach to saving

Natalie Holt | Supplied

There are probably a whole host of reasons why Amazon and Netflix are among the biggest brands in the world.

Beyond innovation and tapping into the right service at the right time, one key reason behind these online giants’ success is their ability to personalise products to their customers.

Amazon does this through its “customers who bought this…” feature – a way of seeing what “people like you” are viewing and buying. Netflix offers personalised viewing recommendations, with “top picks for you” powered by vast amounts of data collected from its worldwide audience.

So what if you could use the same approach for saving and investing for the future?This is an idea the financial regulator, the Financial Conduct Authority (FCA), is exploring.

The FCA calls this targeted support. For example, if you want help with your pensions, want to know where to invest, or if you have enough money to retire, you could use this service to receive suggested actions to take based on people in similar circumstances to your own.

The problem they are trying to fix is at the moment is you either have to work these questions out for yourself or work with a financial adviser.

Your pension or investment company can help, but only up to a certain point. For those who need more help but aren’t able or willing to pay for financial advice, a lot of people end up falling through the cracks.

Research shows us how real this problem is. Recent figures from financial services firm Nucleus, as part of its annual Retirement Confidence Index, found that just 34 per cent of those surveyed felt confident they would have enough money to live comfortably for the rest of their lives when they come to retire.

The report also found that more than half of the respondents underestimate how much money they would need each year for a comfortable retirement.

Separate research from the Pensions and Lifetime Savings Association, which represents pension and investment companies, has come up with some retirement numbers to aim for. In other words, how much are you likely to need for the kind of life you want?

For a comfortable retirement – think four-star holidays, a new kitchen and bathroom when you need them, and money left over to help others – the research suggests a single person would be looking at spending £43,000 a year. This goes up to £59,000 for couples.

These numbers might seem high, but they are just a rule of thumb. The amount you will need will depend on the lifestyle you want and your own situation.

Targeted support services don’t exist as things stand – the rules for how these would work are still being finalised. The good news is if you want financial help right now, there are many options available.

Websites such as MoneyHelper.org.uk and its Pension Wise service are a good place to start.

You may be able to get financial support through your work, or companies such as your pension provider, bank or building society.

And, of course, there’s the Scotsman Money pages to help too.

For a truly personalised service, based on getting to know you and what you want from life, it’s best to speak to a financial adviser.