Start ItThe basic state pension is £97.65 per week (for a single person) for the 2010/11 tax year. Some people may find this is insufficient to pay for basic living costs let alone holidays, socialising, luxuries, birthday and Christmas presents and all those little extras that make life more enjoyable. There are some additional state benefits that might be available to you but if you would like to enjoy a similar standard of living in retirement as you do now, you will need to plan for it.
- The state pension age for both men and women is to increase from 65 to 68 between 2024 and 2046 – if you want to retire before the state pension age, you’ll need private provision to fund it.
- You can contribute as little as £20 per month and obviously the sooner you start the better, because your savings will have more time to grow.
- For each pound a basic rate tax payer contributes to a pension scheme, the pension provider claims tax back from the government at the basic rate of 20%. In practice, this means that for every £100 you pay into your pension, you end up with £125 in your pension pot. Better still if you’re a higher rate tax payer because you can claim back a further 20%.
- Children’s pensions can be opened with as little as £1 and can be contributed to by other people such as grandparents and other relatives and friends. By setting up a pension fund for your children or grandchildren now, you will be making a valuable contribution to their lives and retirements. Also because the funds are in pension wrapper they will grow in a tax free environment and cannot be squandered on other things because they cannot be taken until aged 50 (55 from April 2010).
Our retirement planning and pension review service is specifically designed to help you take charge of your own retirement plans. We take a comprehensive look at what provision you have, where it’s going to place you, consider how this fits with where you want to be and then, if appropriate, make a recommendation to make up any shortfall