At present, state pensions yield around £10,000 a year, which for most people is not nearly enough money to survive on. Over the next few decades the value of a state pension is expected to drop even further, which is why it’s important for everyone to get involved in pension schemes and start saving for their retirement.
The younger you are, the more benefit you will get from your pension so it’s advisable to start one as soon as you enter the world of work.
How much should I pay into pension schemes?
There are many private pension schemes to choose from and many of them can be very lucrative. When it comes to the amount you should pay into a pension scheme, it really depends on how much money you can save. The more you pay into a pension scheme the more you will get out of it when you retire. Some financial experts would also advise that it’s wise to spread your investments around so consider things like ISAs or stocks and shares as well as pension schemes.
Are work related pension schemes worthwhile?
Most companies offer some sort of work related pension scheme where part of your wages goes into a pension scheme and your employer also contributes a certain percentage. This type of pension would generally not be enough for a retiree to survive on but it is still worthwhile having a work related pension scheme as there is no point turning down free money.
Will I need to work past retirement age?
If you already have a pension scheme then it’s possible to work out how much money you will be able to claim by the time you are 65. If the amount you will get does not seem adequate then you may need to work longer than you anticipated. Alternatively you can start saving more now and look for other ways to invest your money that could see you get a bigger return such as investing in stocks and shares.
Do I have to have a pension scheme?
There is no law in the UK that says you have to have a pension and there are other ways that you can invest your money for the future. However, since the recent controversy where many people lost their pensions, pension schemes have become more secure and using one is probably one of the best ways to save your money for the future. However, before deciding on a pension scheme you should always take time to shop around and investigate all of the different pension schemes that are available to you.