When you reach the state pension age you can claim for your state pension, which means you will receive a regular payment by the government. Your eligibility for this is dependent on your age, gender and National Insurance record. The Department for Work and Pensions (DWP) has produced a report which suggests that workers under the age of 30 today may be unable to get a pension until they’re 70! These numbers are scary, so we have written a guide to help you think about saving for your retirement. There’s no time like the present, so why not start today!
All employers must offer a pension scheme where you can voluntarily pay into your pension every month. Your employer will also add money into the pension scheme too. You have the option to choose when you want to contribute and how much! Speak to your manager to find out how much you’re entitled to and how you go about setting up a pension plan within your work.
Another way to ensure you will have a regular income when you retire is to save privately. There are plenty of ISAs available for saving large amounts of tax-free cash. An example of this is the Lifetime ISA which is designed to help you save for your retirement. It’s a tax-free account that allows you to invest up to £4,000 a year. Definitely worth thinking about if you’re under 40 and looking to self-fund your retirement.
If you have some disposable income and are looking at other ways to save for your retirement, property investment may be an option for you. If you’re already paying off a mortgage you may eventually have equity in your house which could be used for cash when it comes to retiring. You may be able to downsize which could free up some equity depending on the property market. The other option is to look at equity release which is a scheme that allows you to access your property’s value for cash in retirement.
For more information on equity release click here.
Every penny counts
Why not save each one pound coin you get! At the end of the month, you could put them in a savings account. They’ll soon add up! If you’re feeling generous, you could even save the new £5 notes.