The younger you are the more time you always feel you have in anything you do. In terms of planning for the future and your retirement from work it isn’t really something you think about from an early age, even when you start to build a career through your 20s and 30s. For many young people the first savings are put towards buying a home, saving for a wedding, starting a family, building a business, or going travelling. The last thing you want to do is be prudent and put away for your retirement (especially when the signs are that we are told we will work for much longer than our parents generation for a lower pension pot).
There will always be a nee for short-term financial assistance in any walk of life. Whether this is borrowing from a responsible payday loan lender to resolve a short-term issue, or borrowing a larger amount of money to secure the purchase of a property. All of this should be able to take place whilst also planning for your future. It makes no sense at all to ignore your retirement, as it will come eventually to all of us.
There was help in 2012 with government legislation that changes the way pensions in the workplace work, and it is worth reiterating these now so that you are well aware of your rights and obligations when it comes to a pension. As more people struggle upon retirement, with soaring elderly care costs and other factors leading to people taking on part-time jobs and even full-time jobs post retirement from a full career, what is it that you can do now to prepare financially for your future?
Since 2012 it is mandatory for every employer to offers its employees a workplace pension. As an employee you are under no legal obligation to accept this, but you should look at all options before coming to that decision. It is beneficial to many people to add money to a workplace pension, as it provides you with an added level of security financially once you have retired from work. Whatever you pay into the workplace pension scheme, your employer must do the same.
There are a few options open to you within a workplace pension scheme. The first is that of automatic enrolment, where your workplace pension is automatically removed from your wages each month (alongside a matching employer contribution). Anyone over the age of 22 and earning more than £10,000 per year can receive this. A final salary scheme is a scheme where your salary has a direct impact on the payment into your pension pot, and your final pension amount is worked out based on the number of years you have been part of the scheme and your salary at retirement age.
On top of any workplace pension scheme you’ll also receive a state pension, which we all pay into through our tax and national insurance bills. The official pension age has changed in recent years and is likely to continue to do so, so be sure to understand when you can draw your state pension whilst planning for retirement.