Pension Awareness Day raises awareness of the danger surrounding pension poverty, paritcularly those those who aren’t saving enough for their future to make sure they are not caught short after their flourishing careers draw towards retirement.
Pensions, particularly workplace pensions, are an integral part of making sure careers don’t just support you in the short term but continue to serve you later in life. We are advocates of encouraging jobseekers to get the most out of their career and investing in their future.
The following is some information you may or may not know about Pensions:
The current ‘new State Pension’ for those yet to reach State Pension age will pay a maximum of £129.20 per week, totalling an annual income of £6,718.40 (depending on NI contributions), even less than it was three years ago at £8,296.60. For most, it will be essential to have an additional source of income and NOW is the best time to put that in place.
Information from the charity Age UK shows concerning figures that 14% of pensioners in the UK currently live in poverty, with a further almost 11% living on the brink of poverty - with their largest source of income being state pensions. These percentages indicate the importance of preparing now to avoid slipping into becoming a similar statistic and with pensions, the sooner you can start, the better!
Since 2012 the Government have been rolling out auto-enrolment workplace pensions to encourage you to save for your retirement, with the added incentive of receiving additional contributions from your employer.
UK employees aged over 22 earning more than £10,000 per year are automatically opted into a pension scheme by their employer (there is the opportunity to opt out at this time). Since April 2019, the minimum contribution increased to 8% (of which 3% must be from your employer); an amount that should allow people to live comfortably when they reach retirement age.
It is important to be mindful of the increasing minimum contributions now as it also means that you will have to increase your minimum contribution. For some, this may be a stretch and could lead to a higher percentage of employees opting out of the workplace pension scheme.
If your workplace pension can’t offer you enough, maybe think about putting in more than your employer or taking out an additional private pension.
Pension Awareness Day is an excellent opportunity to spare a thought as to whether your current pension contribution is sufficient; what more you could do to ensure you are supported when it comes to your retirement.
Speak to your employer or check your contract to see how much your employer is willing to contribute above the minimum. When looking at your next job offer, take a deeper look to see how much your employer is willing to contribute above the minimum requirement, to see if you can start filling your retirement pot now.
For more information, or to be informed of more advice pieces like this, please get in touch