It is surprising that given the importance of providing an income at retirement that many people leave it later on in life before contributing to their pension. Putting money aside for retirement is one of the biggest investments most people make - it can be bigger even than buying your home. So it’s important not to make a rushed decision.
Peace of Mind
Everyone needs to plan for retirement. People are living longer and healthier lives, so it is even more important to think about how and when to save for retirement. Retirement can last for 20 or 30 years, maybe even longer. The basic State Pension is a start but it may not be enough to give you the standard of living you want.
Control
It’s never too early to start saving for your retirement. You may have other financial priorities at the moment, but don’t make that an excuse to put off saving. It is generally accepted that the older you are the more you will need to save, as there is less time until you retire. If you currently can’t afford to save or can only put aside a modest amount, you can always start payments or increase them at a later date if you are able to do so.
Retirement planning is a long-term goal. You will need enough income in retirement to support a comfortable lifestyle for you and your dependants. The savings you make in the early years of your working life are the most important, as they have the most time to grow. Don’t underestimate the contribution these early savings can make to the overall retirement savings.
Tax Efficient Savings
If you save through a private pension scheme you will benefit from the very generous tax relief that your contributions will attract. Put simply, the more you can afford to pay, the more the Government has to pay direct into your scheme by way of tax relief. For example, for a basic rate tax payer, for every £78 paid into the scheme the Government will add a further £22.
Types of Pensions
Many people have differing needs when it comes to retirement planning. At GEM Financial we are able to give you guidance on most types of plans including Personal Pensions, Group Pensions, Stakeholder & SIPP (Self Invested Personal Pensions). If you have any queries regarding any of the above please feel free to contact us and one of our Personal Advisers will be pleased to help.
