Flexibility: With tax relief, employer contributions and optional lump sum payments, you may be able to save more than you think. These days we are living longer than previous generations. In fact, most of us can now look forward to 20 or even 30 years of retirement. A pension can help you plan for these years, whether you want to retire to the country, travel, or spend time with your grandchildren.
The money you save into your pension plan is invested so that your fund can grow over time; this is why the earlier you start a pension plan, the more time your retirement fund will have to grow and the bigger your pension pot will be. Unlike a regular savings account, money invested in your pension can earn important tax breaks. And when you retire and look for access to your fund, the benefits of your pension can be available in a tax efficient way.
Check out our personal pension tax relief calculator to see the tax benefits available to you. Whatever your personal circumstances are, we can help you choose the type of pension that works for you.
The value of your pension at retirement depends on how much you can afford to put away each month, the length of time you are making contributions, the type of pension plan you select and the investment return. One thing we know is that the sooner you start a pension, the bigger it should grow. Starting a pension is the first step in a journey that could last for 40 years or more.
A lot can happen over 40 years, and we'll be there to help you manage your funds so you can enjoy your retirement. Our Pension Calculators can help you decide how much you can afford to save and our team of advisors can help you through these important decisions. Most people get a state pension from the government which covers your basic needs. But it's also a good idea to try and save some extra money in a pension fund, to give you a decent standard of living.
Your employer has to offer a workplace pension scheme by law. A workplace pension scheme is a way of saving for your retirement through contributions deducted direct from your wages. Your employer may also make contributions to your pension through the scheme.
If you are eligible for automatic enrolment, your employer has to make contributions into the scheme. Occupational pension schemes are set up by employers to provide pensions for their employees. There are two different types of occupational pensions:. Final salary pension schemes can also be called defined benefit schemes. In a final salary scheme, your pension is linked to your salary while you're working, so it automatically increases as your pay rises.
Your pension is based on your pay at retirement and the number of years you have been in the scheme. In most final salary schemes, you pay a set percentage of your wages towards your pension fund and your employer pays the rest.
This means it's usually a good idea to join a final salary scheme if your employer offers one. However, final salary schemes are becoming less common and most employers no longer offer them. Money purchase schemes can also be called defined contribution schemes. The money you pay into the scheme is invested with the aim of giving you an amount of money when you retire.
Your pension is based on the amount of money paid in and on how the investments have performed. You'll usually pay a percentage of your wages into the scheme and your employer may also pay a regular amount in but this isn't always the case. However, your employer may have to offer you automatic enrolment into a workplace pension, in which case they will be obliged to make contributions. If you're offered a money purchase scheme through the workplace, it can be a good idea to join if your employer makes contributions.
However, if your employer isn't going to make any contributions to the pension or you are not yet eligible for automatic enrolment, you may want to compare the benefits of the scheme with personal pensions schemes elsewhere.
For more information about personal pensions offered outside the workplace, see choosing a personal pension. As well as a pension when you retire, occupational pension schemes often offer other benefits such as:. Your employer must enrol you into their workplace pension if you're an eligible employee -this is called automatic enrolment.
You'll be eligible if you're:. You can opt out of your workplace scheme but it's a good idea to pay into it if you can afford to. This is because your employer has to make a contribution into the scheme as well as you. You should get information about any workplace scheme you are entitled to join within two months of starting work. If you don't, contact your personnel or human resources HR department.
There are different types of workplace pension schemes with different benefits. It's important to understand the differences so that you can work out whether or not the scheme is right for you and what other options you may have.
You can find a tool to help you choose whether to automatically enrol into your workplace pension on the Money Advice Service website. If you're already in a workplace pension that meets the rules about automatic enrolment, you don't have to join another pension.
You can find more information and frequently asked questions about automatic enrolment on the Department for Works Pensions DWP website at www. You can also find more on joining a workplace pension automatically on the Gov.
UK website at www. Workplace or group personal pensions and stakeholder pensions work in a similar way to the ones you can arrange for yourself. Your employer chooses the pension provider but you will have an individual contract with the pension provider.
Group personal pensions and stakeholder pensions may be an option if you are not eligible to automatically enrol into your workplace pension. You pay contributions into your pension fund direct from your wages. Home Employers Workplace pensions - employing staff for the first time I'm an employer who has to provide a pension Step 1. Choose a pension scheme. Step 1. You should do this as soon as you can as it can take some time to complete.
You'll need to find a scheme yourself or get help from your accountant or a financial adviser. Find a scheme yourself You should look at different schemes before you decide which is suitable for you and your staff. Get help from an adviser If you have an accountant, they may be able to help you find a scheme or a financial adviser that can help. What's next? Is this page useful? Problems with this page? Page not useful? Why not?
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