If you have ever fancied giving yourself financial comfort and security in your pension years then here are a few money tips the finance experts at Wonga.ca would like to give you to ensure your retirement will be free of financial burden and austerity:
A pension is not just something that older people should worry about! A quick hypothetical to consider – When a 22–year old employee was asked at one company he was employed at if he wanted to start paying into a pension fund, he said no and couldn’t believe any one of his age would be worrying about what would happen when he got to 65. When you are young, pensionable age seems more than a lifetime away. However, anyone paying into a pension for 43 odd years would have a very healthy pension retirement when reaching 60 or 65.
Many companies in the UK are being told they must offer new employees a pension. You will be automatically enrolled now providing you are over 22 and provided you are earning above £9,440 per annum. The real booster of a pension scheme is the tax relief, which is essentially in two parts.
You get tax relief on the money you contribute into a pension, while the monies you gain from the investments you make with that money cash are pretty much exempt from tax. So, a basic rate tax payer would get tax relief of 20 per cent on every £100 he or she paid into a scheme.
Planning a wealthy and financially worry-free retirement means starting as early as you can. If you begin young it is obviously much better but if you have left your retirement funding plans in tatters, don’t worry you can still start from now by saving as much as you can. Any funds you may have over should be deposited into a savings account that you won’t easily be able to access.
Savings should be treated like a regular bill or monthly expenditure that you have to endure. We always pay our gas, electricity, telephone bill, rent or mortgage each and every month, so why not add to this list one for your savings? It can be an amount of your choosing so you won’t have to pay this “bill” if you can’t afford it one month. If your regular savings – that you promised yourself you would try and put away each month – are £20, and you find one month you cannot even afford this, then just put away £10 or even £5 that month, but do try and put something away.
Never before has the issue of cash saving for retirement been such a hot issue. In around 15 to 20 years from now many of the baby boomer generation will approach retirement and the pension population will swell. So it is a small wonder thatso many people are thinking about how to get the most out of their savings before moving into retirement.
ISAs are a great way of investing any savings you do have, an ISA exempts you from paying any tax, so your return is much greater.