14th September 2016 at 10:00am
With Pensions Awareness Day (PAD) hitting the streets on 15 September we thought some of you might be wondering what all this fuss is about pensions.
So to help support the campaign, whose main aim is to be a wake-up call for the nation and to get people thinking about their pension, we thought an introduction to pensions and what they could mean for you might be useful.
So what is a pension?
Well in simple terms, it’s a special kind of long-term savings plan and a tax-efficient way to save money during your working life.
And why would I want one?
It makes sense to put some money away for when you’re older and that’s what pension schemes help you do. You save a portion of your income regularly during your working life so you can have an income in later life, when you want to work less or retire.
Do I actually need one?
People are living longer. So having an adequate pension has never been more important. If you’re looking forward to a long and rewarding life after work, saving as much as you can for as long as you can play a big role in giving you the lifestyle you would like. And having a pension in place to do this is a great start.
But are they not complicated?
What’s actually quite a simple concept can seem complicated as there are different types of pension and lots of ways that you can pay money in and take money out, this can perhaps put people off a bit. But although there are several different types of pension schemes available, they all have the same aim – to help you save money and provide you with an income when you’re older.
Can my workplace provide a pension?
Yes, and they now have to. The Government wants to make it easier for millions more people to build up a pension so it’s now become law that all employers have to put their workers into a pension scheme.
If you are aged between 22 and state pension age (for someone retiring today, state pension age is 65 for men and 62 for women) and earn more than £10,000 a year before tax you’ll now be auto-enrolled into a company pension scheme.
As your employer will automatically enrol eligible workers into a workplace pension, it’s a hassle free way of saving while you earn.
Where can I find out more about pensions in general?
There’s lots of helpful information out there to help get you started or keep you on track. We’d recommend PADs page on pensions for starters, it will give you some guidance on the types of pensions available. And we’ve also a selection of handy guides on standardlife.co.uk that could prove useful too.
It’s never too early or too late to start saving for the future, but what’s vitally important is that you do.
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The information in this blog or any response to comments should not be regarded as financial advice. A personal pension is an investment and its value can go up or down and may be worth less than you paid in. Laws and tax rules may change in the future. The information here is based on our understanding in September 2016. Your personal circumstances also have an impact on tax treatment.