46% Of People Doubt They Will Have Enough Money In Retirement – Don’t Be ‘One Of Them’
A recent study* carried out by the independent body that works to promote social change, the Joseph Rowntree Foundation, found that 46% of the general public do not expect to be able to put aside enough money to retire comfortably and believe they will be forced to keep working well into their later years.
However, the outlook doesn’t have to be this bleak. Successive governments have offered tax incentives to encourage us all to save more for retirement. A number of measures have been introduced, including auto-enrolment which gives many more workers their first opportunity to accumulate savings for their future in a workplace pension scheme. This means that employees who are not currently saving into a workplace pension will be automatically included in a scheme, although they have the right to opt out should they wish to.
Everyone Needs A Plan
The new state pension will come into force from 6th April. This has been fixed at £155.65 a week, although not everyone is set to receive the full amount.
Armed with your state pension details, there are steps you can take to increase your pension provision. It’s important to remember that even smaller sums saved regularly over the course of your working life can mean a better standard of living in retirement. The earlier you start to save for your pension, the more time your money has to grow.
Pensions not only offer a great way of providing for your future security in retirement, you can also claim the valuable tax relief available on your contributions – 20% for basic taxpayers.
In addition you can make pension contributions on behalf of your spouse and children; you can invest up to £3,600 a year into a stakeholder pension for each of them. As basic rate tax relief is available, a contribution of £3,600 will cost a higher-rate taxpayer £2,880.
If it’s been a while since you have discussed your pension planning, this could be a good time to schedule a review.
*Joseph Rowntree Foundation, Preparing for later life, Jan 2016
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