182 If you’re thinking that pensions are just for old people, then you need to think again with this site The Slient News. Your pension is the thing that will support you in your old age, so neglecting to plan ahead could mean that you don’t have enough money to support yourself in your twilight years. Table of Contents What is a Pension?Auto EnrolmentTax ReliefHow Much Should I Put in a Pension?What’s An Annuity? What is a Pension? A pension is essentially a pot of cash that you pay into, that the taxman doesn’t take anything from, for your retirement. When you retire, you can draw money from your pension pot, or sell it all to an insurance company for a regular payment until death which is called an annuity. As a UK citizen (and National Insurance contributor) you will get a state pension. However, this is not enough to live comfortably, and you will need to contribute to a private pension in order to survive. Auto Enrolment Employers are now forced to offer you a pension. You have the option to opt out of your pension, but if you do nothing, you will automatically enrol on to it. If you opt in, you essentially get a pay rise because your employer will also contribute to your pension pot. This means that your overall income will rise, but you will have less disposable income in your pay check. Tax Relief The tax relief that comes with a pension is in two forms. You’ll get tax back on the money you put into your pension, while the gains from the investments you make are mostly tax free. You automatically get 20% tax back from the government as an additional deposit to your pension pot if you put your money in your pension yourself. If, on the other hand, your employer puts it in before tax, then it’s never taxed to begin with, so it amounts to the same. However, the tax relief on the money you put in yourself is not 20% of the money you put in; it is 20% of your earnings before tax. So whichever way you decide to contribute to your pension, it will equal the same. How Much Should I Put in a Pension? When it comes to pensions, you should contribute as much as you can afford. However, the key to accruing a good pension pot is starting early. The general rule of thumb when it comes to saving into a pension is to half your age and put this percentage of your pre-tax wage into your pension pot each year until you retire. So the earlier you start, the lower the figure will be, and the more time your money has to grow. Putting away a consistent percentage of your earnings will also help keep payments affordable, but will also mean that you keep up with your goals for a comfortable retirement. What’s An Annuity? Until April 2011, you had to buy an annuity by the age of 75. Now, however, you have more of a choice. You can still buy an annuity, but you can also get what is called a ‘flexible drawdown’ or ‘capped drawdown’ product. An annuity is insurance that you’ll get an income for the rest of your life. However, choosing the wrong one can mean that you’re trapped in a poor investment for the rest of your life. Take a look at a range of different annuities on this website Bumber, including No Nonsense Annuities, or get a broker to help. 0 comment 0 FacebookTwitterPinterestEmail Yasir Asif Through his work, Yasir aims not only to inform but also to empower readers, equipping them with the knowledge and understanding needed to make informed decisions in an increasingly digital financial world. With a commitment to accuracy, integrity, and innovation, Yasir continues to be a driving force in shaping the discourse surrounding fintech on FintechZoomPro.net. previous post Tips For Cabinet Hinge Manufacturers next post How to Find a Reputable HDMI Cable Manufacturer Related Posts How Much Packaging is Crucial for skincare Products? May 7, 2024 Justice in the Digital Age: How AI Lawyers... May 5, 2024 How Can You Safeguard Trees From Summer Heat? May 4, 2024 What Are The Best Ways To Exterminate Bed... May 4, 2024 The Horse Saddle: A Complete Guide May 3, 2024 Heartfelt Option for this Special Occasion: Send Rakhi... May 2, 2024 Designing a Modern & Functional Dental Practice: The... May 2, 2024 The Unfolding Essentials of Under Counter Fridge Selection May 2, 2024 Navigating Prostate Health: A Comprehensive Guide to Prostadine April 30, 2024 Changing Perspective: 7 Drawing Room Designs that Incorporate Study... April 29, 2024