Why buy into a Pension?
Many of us enjoy living in the present without considering our position year’s ahead. But it is important that you do so, in order to maintain and support a good quality of life when you retire. We don’t know what the future holds but saving into a pension as early as possible will guarantee security and a good standard of living at a time you earnestly deserve it!
Start Planning Now
It is a shocking fact that over half of the working population in the UK are failing to make enough payments to ensure a decent pension when they retire or have no pension scheme in place at all.
Where do you want to be when you are eligible to stop working? If you are not saving into a pension you are creating three options for yourself:
- Get serious about your expectations of retirement.
- Make a plan and start saving what you need.
- Work for longer. You’ll need to.
Are you relying on a state pension to provide for you in retirement? It is worth considering that those eligible for a full state pension currently receive £116 (2018) per week. (An amount many would consider well below what they hope to retire on.
Make a Goal
You have career goals, home goals, holiday goals, so start thinking about your retirement goals and make a plan. Consider what you need to save and make a plan to achieve it.
Why a Pension Scheme?
A pension is a long-term savings plan with a favourable tax treatment compared to other forms of saving. Essentially, a pension means that while you save, you are eligible for tax relief on contributions of up to 100% of your annual earnings.
Basic rate taxpayers receive 20% relief. For instance, if you make a payment of £1000, the taxman will add £200, to make a total of £1200.
Work Place Schemes
To help people save, employers are now legally required to enrol employees into a work place pension scheme, called an ‘automatic enrolment’.
You will be automatically enrolled if you:
- are not already in a suitable pension scheme
- are aged between 22 and 68
- earn more than £10,000 a year
- work in the UK.
Once enrolled, a minimum contribution of your earnings will also be added to by an employer contribution (currently 1%) and 0.2% tax relief. Essentially, this is a win-win scheme for your future.
Giving Your Pension a Boost
There are two ways to increase the pension you are set to receive. Firstly, increase your current contribution or start an additional scheme. Secondly, delay the date you will begin to receive your pension, giving you more time to contribute to the overall balance.