[AD] Retirement and pensions are words that a lot of us would associate with old age; and in a way this is true but they are also two very important things that need to be considered as early as possible to make for a worry free and comfortable time in our later years.
As well as being put on a back burner due to thinking we have all the time in the world to get this sorted it can more than a little confusing and all to tempting to bury your head in the sand…just as I did!
With over 10,000 pension schemes available, changing demographics in the way pensions work and a huge lack of knowledge on the subject is no wonder people don’t know where to start when it comes to choosing a pension.
A pension is in short a savings plan that you put into – usually monthly that allows you to have a regular income once you are retired. The bonus to saving in this way is that you don’t have to pay tax on this, making it the most effective way to save for your future.
We all need a pension as a way of being supported once we are no longer working and if provisions aren’t put in place then a state pension will have to be relied upon and in turn things will have to be sacrificed due to a limited income and I’m sure that this isn’t how any of us would like to spend our golden years.
Aside from the state pension there is a workplace pension and a personal pension.
Workplace pensions simply take a contribution from you, your employer and the government each month and this is then given to you once you reach retirement age; and a personal pension works by having money put into a plan on a monthly basis from a provider you have chosen yourself. These are best suited to self-employed persons such a myself.
This is of course a very brief outline of how pensions work and with limited access to advice unless you have the funds to a financial advisor it can still be very hard to know which provider is best suited to you and your needs. For me the worry of not having an employer to take away some of this pressure was huge and I wanted an bit of an idiots guide to help me make the right choices.
Pensions Profile offer an online pensions health check that is a great way to check the status of your pension with no cost to sign up, which is a bit of a no brainer really! Even if you already have a pension in place it could be poorly performing and they can get this checked for you. Many people are at risk of having a poorly performing pension, especially those with pension dating back pre-2000. Sadly women tend to be paying higher fees than men as their pot sizes are often significantly lower than men’s. They can see if you have any missing pensions from previous employer, this was the case for me and it was great news to find this and know there is a little more available to me. They can even give you an outline of how much you will need to be comfortable during your retirement which gives you a real peace of mind in all areas.
I hope this has made things a little clearer for you and it has given you that push to get your future finances sorted as its really not as scary as we all think.
For more information and to sign up for your pension health check click HERE.