Your pension is almost certainly the most essential part of retirement planning. They can provide a reliable, guaranteed source of income for life, with some shrewd forward-planning, will help you to maintain the lifestyle in retirement that you have grown accustomed to during your working life.
In addition to the obvious benefits, pensions provide some additional features that may not be quite so obvious to the untrained eye.
Tax advantages
In many countries, pension contributions are tax-deductible. This means that you can reduce your taxable income by making contributions to your pension, which can lower your tax bill and help you save more for retirement.
Saving for the long term
Many people struggle to save for retirement because they prioritise short-term expenses over long-term savings. Pensions encourage long-term saving by locking away your contributions in an untouchable (metaphorical) vault until retirement. This helps ensure that you have enough savings to cover your retirement expenses.
Flexibility
You can choose how much you contribute to your pension within limits, and often how you want to receive your pension income. You can also choose the type of investment strategy you want for your pension, which can affect the level of risk and potential returns. Your Financial Planner will help you with this.
“Free” money
If you are part of a workplace pension scheme, UK law currently requires your employer to pay at least 3% of your salary into it (you are also required to pay a minimum of 5%). Some employers will even go the extra mile and match your employee contribution, up to a limit.
Social benefits
Governments and employers often offer pension schemes to incentivise people to save for retirement. This reduces the burden on the state welfare system and helps ensure that people can support themselves during retirement.
What next?
It’s never too early or too late to start saving for retirement, and a pension is an excellent way to secure your financial future.
If you would like to discuss your pension options and start planning your retirement, please do get in touch with us by telephone on 02920 782330 or via email at theteam@uniqfamilywealth.co.uk. Our lines are manned Monday-Thursday, as we operate a four-day working week.