What is a Pension?
The UK pensions system is unnecessarily complicated and seems to be changing as often as your kids need new shoes!
MMM has taken out the complexity and brings you the information you need to know – don’t worry, we will keep you posted with all changes in the law, so everything here is always up-to-date.
Pensions are savings vehicles that allow you to put money away for your old age.
If you’re a UK taxpayer, then you should certainly save for a pension. The younger you start, the better – and if you haven’t already, then don’t worry, it’s never too late.
It may not seem important now, but when people do retire, they are often hit by the shock of a significant drop in their income and realise they can no longer enjoy the life comforts they have grown accustomed to. The ideal age to start saving into a pension is in your twenties or as soon as you start work.
Although the state may help you out, you may not get much if you haven’t worked long enough and even if you have, it will not be enough to see you through old age comfortably, so it’s important that you make additional arrangements through a personal pension arrangement or through your employer.
Saving for a pension also comes with a number of incentives, such as tax relief and additional contributions from your employer. New law, known as auto-enrolment, also means that employers are obliged to offer you a pensions scheme – so ask your employer about its pensions scheme.
More people are beginning to realise that they need to start saving for a pension and the younger the better. But how much you should stash away for old age can be difficult to work out and very much depends on your age, your employment situation and affordability.