There are many ways to save and to raise money for your retirement. One of the most common ways to do this is with a pension.
The easiest way to think about a pension is to think of it as money that will be available to you upon retirement. There are three typical ways a pension can be created:
- State Pensions and benefits: this is money contributed by the governement that is paid to individuals upon retirement and/or reaching a certain age
- Employer Pensions: this is money contributed by your employer that paid out to you by a current or previous employer upon reaching retirement age
- Personal Pension: this is money that you have contributed yourself for your retirement
You are not guaranteed a State Pension. Many people incorrectly assume that they will receive a state pension when in fact they will not. In addition, the payments for a state pension are usually not large enough to live off of. The full basic State Pension for 2006/07 is £84.25 a week for a single person and £134.75 for a couple.
In addition, Employer Pensions are decreasing and fewer employers are providing adequate pensions to fully cover employees retirement.
With rising costs of living it is becoming more an more important for individuals to consider contributing personally towards your pension. The earlier you start contributing, the greater the benefits you will receive from long-term growth in your pension through investment gains.
It is strongly advised that you speak to an investment advisor to get quotes and information on different personal pension options to insure that you are properly covered for your retirement. Start saving early and save often!
To be connected with an investment advisor who can help you on your way to financial freedom, fill out our short form, and SimplyFinance will put you in touch with an advisor that will answer all your questions and who will search the market to find the best pension for you.