From workplace schemes to personal plans and State Pensions, with so many options to consider it's no wonder many of us don't like thinking about how we'll pay for our retirement. Here's a brief overview of three main options available to help you start planning:
A personal pension plan could be a good option if you’re self-employed, which means you won’t automatically be enrolled in a workplace pension. You’ll get tax relief at the basic rate and higher rate tax payers could claim back the difference. Pensions also grow tax efficiently and you can take 25 % as a tax-free lump sum on retirement. You can either make regular or lump sum payments to your provider. If you already have a personal pension plan, ask your provider for a forecast to find out how much you’re likely to get when you retire.The amount you’ll get when you retire depends on a few different things, including how much you’ve paid in and how well the fund’s investments have done. For independent guidance, go to the Money Advice Service.
The State Pension is a regular form of income that you receive from the Government once you have reached State Pension age. The amount you receive will be based on your National Insurance contributions.The age at which you reach State Pension age varies and is dependent on when you were born. For many years, the State Pension age was set at 65 for men and 60 for women, however, changes in legislation have meant that this is no longer the case. You can find more details about changes to the Pension Age and how much you could expect to get on Gov.uk
Because of a law change, all eligible workers are gradually being enrolled in workplace pension schemes by 2018. This means a percentage of your pay will automatically be put into the scheme each payday. Employers often contribute to your workplace pension too. You should ask for a pension forecast to find out how much you are likely to get. Topping up your employer scheme can often be the cheapest and easiest way to boost your pension. But you might want to consider putting extra money into a personal pension instead – make sure you get financial advice and weigh up the options.
Not many people have a ‘job for life’ these days. Most people work for between five and nine employers over the course of their lives – and often they leave a pension behind when they get a new job. Maybe you’ve moved house too, and hadn’t noticed that you’d stopped receiving an annual statements from your previous pension provider. To plan for your retirement, you’ll need to work out much you’ll be getting from all pensions, which means you’ll need to track any that have gone missing. For help tracking down an old pension, conact the Pension Tracing Service or see this helpful guide from the Money Advice Service.
There are a lot of things to think about when it comes to planning your retirement. Here are some useful links to help you get started
These links are to non-NatWest websites. NatWest is not liable for the accuracy of the information provided on these websites.