Paul Leatherbarrow, Liverpool
Pensions plans are financial tools whose purpose is the provision of money in old age. They are saving plans with tax relief which provides a regular income in retirement. Payments can be made into a Personal Pension Plan either as a lump sum or as regular payments, or a combination of both. The payments can be changed as your income changes throughout your working life. It is worth noting that a Personal Pension is not tied to your employment.
If you want to be sure that you will have something to live on when you retire, you need to save. A pension is a good savings vehicle due to the tax breaks. Start planning today and aim to improve your own retirement as much as possible. Then you will not be reliant on the whims of politicians and civil service bureaucrats What does a Pension do?
A pension is a sum of money that is paid to you on a regular basis on ceasing to work. The amount of pension you receive on retirement is largely based on the amount you have saved and the length of time you have saved for.
In addition, because the majority of pension funds are invested in the stock market, the value of most pensions will also be dependant on the management of the pension fund whilst you are contributing into it.
Pensions What You Need To Know We all like to feel that we in the prime of our lives and that the pension years are way off in the distance. Indeed, for many people just the word pension conjures up images of old age pensioners and walking sticks. Pensions are the thing furthest from our minds, right? Unfortunately this is has to change.
Life expectancy in the UK is growing and together with it, comes the expectancy that either people's pensions won't see them through old age or that we are going to have to work longer in order to get a high enough pension to live off. If you are one of the people who has just realised that their future pension needs have to be addressed then you really should read on and bring yourself up to date. As the current expected length of pension contributions is set to a life expectancy of 78, every year that we live longer than that is a year that we have not accounted for in our pension contributions.
What is the Value of your fund Do you know how much of a pension you will get when you retire? Many people are surprised to find how low their expected pension is. We can help you assess your expected pension and, if it is likely to be insufficient for your needs, help you plan to improve it. A pension is a long term investment. The fund value may fluctuate and can go down. Why Is A Pension So Important? Unfortunately the hard facts are that everyday you get closer to your retirement and everyday that you don't pay into a pension scheme is a little bit less comfort in your old age.
Sadly it is no longer considered enough just to rely on the State Pension. If you want to have a comfortable life when you retire and you don't just want to be living off a minimal income then you need to start paying into a pension scheme.
Good pension advice from a reputable financial adviser should arm you with the information needed to be able to choose a pension appropriate to your individual circumstances which will take into account your present situation and your future requirements.
Your retirement should be something to look forward to – a chance to take up new hobbies, spend more time with family or friends or travel the world – not to worry about how to make ends meet.
When would you like to give up work ?, what do you plan to do in retirement? , what concerns would it give you if your retirement income was only going to be half your current salary ?, what would you have to give up if you had insufficient income ?, what plans would disappear ?, how are you going to you fund your retirement ?, how are you going to survive ?, if you had an extra income what benefits would that bring to you and your family?. These are just some questions you need to be able to answer when considering your retirement. I'm just starting out surely I am too young From your first day at work, it makes sense to put something away for the time when you retire. And changes are coming to make it easier to save while you are in work.
Even if it's only a small amount, the money you put away early in life can build up a tidy sum over time. And the sooner you start, the more you are likely to get Its never too early to start saving for a pension, retirement may seem like a long way off but by saving early on means you do not have to save a larger amount of your net disposable income later in life when you want to start enjoying it. When you are starting out there are many more things to spend the money on. Added to that, there isn't always much money left after mortgage, rent or bills have been paid, and people are loathe to see that amount reduced because of pension payments. It is generally accepted that the state pension alone is unlikely to provide a sufficient income during retirement, nowadays we are living longer and expecting more from our retirement years. So we need more money than previous generations.
Why Start Now? The sooner you start saving for your retirement, the more pension plan benefit you'll get. If you leave it until later in life, the amount of money you need to save each month could increase substantially, whereas if you begin in your twenties, you can spread your savings over a longer period. The demographics of the UK population are changing. In the future, there will be a smaller number of workers supporting a larger number of retired people, and with the increase in life-expectancy, retirement itself will become longer and potentially more expensive. Workers are unlikely to be able to rely on the UK state pension as their only source of income and so need to be planning and saving for their retirement now. The current UK state pension for single people is just £97.65 per week. (2010/11) Imagine yourself living on this and then re-consider your attitude to pension savings. How Can I Start? If you work for a company that offers a corporate pension scheme, then you should probably take advantage of it.
Many company schemes offer better benefits than personal pension plans, and in the majority of cases, your employer will also pay into the scheme for you, increasing your funds. If you are self-employed or move jobs frequently, then you may want to consider a personal pension plan. Benefits include flexibility; you can continue to pay into the plan no matter where you are working, and you can adjust your payments in line with your income, and even make lump sum payments. Whatever you decide to do, it is worthwhile taking the time to speak to an independent pensions adviser. With their wide-ranging market knowledge and experience, they can look at your circumstances and help you to decide which pension option is right for you.
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