The simple aim of a pension is to help you save money and provide you with income when you’re older.
Pension funds are the most popular way to save for retirement as you receive tax relief when you make a contribution (the government also pays into the pot when you do), but you can also consider using Individual Savings Accounts (ISAs) as a way to save for your later years.
Final Salary, occupational, SIPPs, SSASs, workplace, state-pensions, personal pensions, company pensions, stakeholder pensions, AVCs, FSAVCs, RAC, Section 32 are some of the different type of pensions schemes available.
As well as the different types of schemes available, there are also different ways and places you can invest the money you have in your pensions.
Currently, when you make a contribution to any type of pension the government also makes a contribution, which is called a tax relief.
For example, if you pay £80 into a pension the government will pay £20. When you retire, you can draw the money from your pension taking as much or as little as you like.
You may not feel much urgency to save for retirement when you are focused on more immediate goals such as buying a home. Planning for retirement is not always high on the agenda for many people until later on in life but it pays to take a long-term view and start saving as soon as possible. Money you invest early will have a long time to grow and small contributions now can make a big impact over time.
Example:
| Years to Retirement | Annual Contribution | Return | Value at 65 |
| 30 | £2,400 | 6% | £203,524.03 |
| 25 | £2,400 | 6% | £141,975.32 |
| 20 | £2,400 | 6% | £95,982.54 |
| 15 | £2,400 | 6% | £61,614.07 |
| 10 | £2,400 | 6% | £35,931.94 |
| 5 | £2,400 | 6% | £16,740.76 |
As shown, waiting too long could cause significant reductions to your retirement figures.
Experts have calculated that most people will need an income equivalent to around two-thirds of a final salary to maintain their current lifestyle once retired. Planning a budget based on how much income from pensions you’ll receive and what you’re likely to be spending your money on will help you identify any shortfalls in your retirement income.
It is important to find a balance between short-term goals and saving for your long-term goals and with good financial planning it is possible to do both. We can help you organise your finances to best achieve these goals.
If you already have a pension, we can review its investment holdings and ensure that they are best suited to your comfort levels and check to make sure that they are performing as expected. If we believe we can help you achieve better performance elsewhere, or that your contract is not the most suitable for your retirement goals we can recommend alternative solutions.
If you do not yet have any pension facility in place we can set you up with a realistic plan that is designed to meet your specific retirement goals.
“We are writing this letter with grateful thanks to Mr Harwin Charles Bosworth who for the last 9 months approximately has been working flat out to trace a pension we were mis-advised about. His diligence and commitment to this project have been second to none. He achieved a substantial sum of money that we thought we would never see again. We are eternally grateful for his help in this matter and his advice with regard to the investment of this money. We will look forward to his advice and guidance in the future and will be recommending this gentleman and his Company to anyone who requires financial advice” Geoff & Babs Isaacs Kippax
