Last week I touched on writing wills and this week it only seems right to focus on pensions. I am on a roll here, humour me!
Here in the UK, state pensions are provided to people from the age of 66 – source came from http://www.gov.uk website. The amount, brace yourself is a paltry £119.30 per week. Those living in the UK are well aware of the rising cost of household utility bills such as electricity, gas and water rates. Let us not forget the cost of food and everyday essentials. Not everyone who reaches retirement age would have paid off their mortgage or indeed have had one to start with. How will they continue to fund their lifestyle when there is no longer a regular salary? Outgoings do not suddenly disappear because we no longer have the means to fund them.
Struggling financially as a more mature person is not desirable in the least. You are less agile, more prone to illness and therefore need to keep warm, eat well and enjoy life. Also after decades of working, surely one would want to “live a little” and pick up hobbies and a lifestyle you could not commit to when you were working. A state pension alone does not allow for comfortable living.
This is where company pensions come into play. Most organisations will contribute a percentage towards an employee personal pension. This is a great incentive for employees to join pension schemes. I took out a pension (reluctantly) at the age of 25. I did miss the reduction at first but saw the benefits which I knew I would receive much later in life. At the age of 25 holidays were definitely my priority and I would have happily poured my salary into travelling if given half the chance!
For those who are self employed or whose company does not offer a pension scheme, consider saving or investing a percentage of your income each month. Carry out thorough research before making a commitment to identify which investment scheme works best for you. It would be ideal if your money cannot be easily accessed – no dipping in and out for holidays and other purchases!
Do you have a pension/investment plan in place? If yes, what influenced your decision; starting a family, advice from a friend or family member?
If no, have you given it some thought?