Right now, retirement might seem a very long way off, but it’s never too early to think about your pension.
Right now, retirement might seem a very long way off, but it’s never too early to think about your pension. Ideally, we should all start planning for it from the day we start work. No-one wants to worry about money in their later years and the way to help prevent that happening is to save regularly into a pension throughout your working life.
Despite pensions never being out of the media headlines, many people still leave their retirement planning well into their middle years. However, the earlier you can start building up a fund for your retirement, the less it will cost you. We can give you straightforward advice on all the different types of pension arrangements such as:
Plus, if you’ve had several jobs over your working life, we can help you decide whether you’d be better off moving your pension savings to just one scheme to improve your retirement prospects.
Why you need to think about your pension
There are some simple but compelling reasons why you should think about pension planning now:
The state pension on its own may not be enough
The full new State Pension is currently £203.85 per week and is based on your National Insurance record. You will need 10 qualifying years to get any new State Pension and 35 qualifying years for the full amount. 1
Tax relief
If you make contributions to a pension, or if your employer deducts your payments from your salary, you automatically get 20% tax relief as an additional contribution into your pension pot. Tax relief may not be automatic, e.g. if the client is in a RAC.
You can claim additional tax relief on your Self-Assessment tax return for contributions you make into a private pension of:
Start early to see your savings grow
The sooner you start making contributions, the longer your money will have to grow.
A workplace pension is a valuable workplace benefit
If you save into a workplace scheme, your employer should match some or all of your contributions, providing a welcome boost to your pension. Via auto enrolment the employer has to contribute 3%, however there is no requirement to match employee contribution e.g. the employer may choose to contribute 8% and the employee not contribute at all.
Retirement options to consider (these options may not be available from all providers)
Currently from age 55 (increasing to age 57 in April 2028), there are a number of options available to you including, assuming the client doesn’t have protection applying in respect of age 55:
So, if you’re self-employed, an employee, work part-time, a company director, run your own business or have accumulated pension pots with past employers, we can offer you advice. After all, retirement should be an enjoyable and fulfilling stage of life, not a time spent worrying about money.
1 Gov.uk 2023
A pension is a long-term investment and the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
The information contained above is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change.
The information provided is for information only and does not constitute individual financial advice.
