Plan For Your Future And Begin Saving For Your Pension, Today
When we’re young and in the early stages of our working life, the last thing on our mind is to start paying into a pension plan. But the younger that you are the better, as the later you begin saving, the more catch up you’ve got to do, plus the harder it’ll be.
State pensions in the UK currently stand at a maximum of £97.65 per week (the amount you will receive will depend on the national insurance contributions you have made throughout your working life). Even when you’re in receipt of the maximum it might still be a struggle to pay for anything more than the bare essentials, it definitely won’t extend to a secure lifestyle.
Therefore, if you wish to benefit from the good life after retirement, you need to start planning, and now.
At the age of 25 if you decide to pay £100 each month into a pension plan, it is possible that you could be eligible for an annual income of £12,000. However, the later you begin saving, the more you’re going to need to set aside each month so as to experience the retirement you would like.
To start with when you’re thinking of starting a pension plan is to calculate just how much you think you may need to live off at the age of retirement. Consider the type of lifestyle you would ideally want to lead following your retirement and just how much you will need to have this. In an ideal world you’ll own your property outright by retirement age, so you won’t need to worry about mortgage payments or rent, but do not forget the cost of maintenance on a home, and the fact that as a house ages, maintenance costs may increase. Also, remember about the price of utilities, and how the cost of these has a tendency to increase quite substantially over time.
If you own a very large property (with the mortgage paid), and would be happy to downsize upon retirement, a smaller pension fund may suffice, because the income produced from the sale of your home should supplement your pension considerably. Whilst right now your may feel that you’ll be in a position to do this, when it actually boils down to it, you may be more attached to your existing property than you realised and you may find it hard to move .
There is also the option to obtain a pension release before retirement. A pension release is where you can obtain up to 25 percent of your pension fund entirely tax free, ensuring that a reduced amount of your pension will be taxable following retirement. However, if you don’t begin saving at the earliest opportunity, you won’t have the money accessible to even consider a pension release. But if you start saving now, you can have peace of mind that you’ll be financially secure once you reach retirement.
This post was written on behalf of Robert Bruce Associates, experts in pension release. For more info on pension release please visit My Pension Release.
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