Start Point - Pensions

Well hello ladies (or gentlemen who maybe reading this)! This is my first ever article so hopefully you will enjoy it or at least learn something.

My starting point is one of my favourite topic pensions.  They receive such bad publicity, however I am going to attempt to change this concept or at least give a better understanding of them. 

For those who are not aware the Basic State Pension is £ 159.55 per week, which equates to  

£ 8,296.60 p.a.  Currently you receive this when you reach the age of 66 and have achieved 35 ‘qualifying’ years paid for through your National Insurance contribution.  There are a number of women who are approaching this age may find that they may not have reached this amount of years.  This effects far more women than men who may have taken time off to start a family or have worked part time earning a low income.  

Could you live on this amount?  Now, for those that are frugal amongst you then the answer could be yes.  So the next question then is do you still want to be working until age 66, 67 and for the younger age group potentially 68, 69 or even 70?  

The hard facts are that there is not enough money in the State Pension ‘bucket’.  This is due to a number of factors but the main ones are that too many people are in retirement, living longer and not enough working people paying into the system. 

So what can you do?  The starting point is look at your own financial position.  If you are employed, your employer will be offering a Workplace pension, look at joining the scheme rather than ‘opting out’.  Like everything in life it may not be suitable for everyone but for the majority of people it will.  This type of pension has a double benefit, your employer is giving you money and so is the Government, yes you understood me correctly, you are being given money that is not going to be taken away from you.  So even if your pension does not grow ( which is not what you want to happen), you are in a positive position.  The main ‘catch’ to this is that you are unable to access it until you reach a certain age.  However, this should not be seen as a negative though.  We have become a ‘spend’ generation and the practice of saving has become very old fashioned, so having an element of money that we are unable to access could be a positive. 

The statistics are showing that a large amount of women have either not been eligible for the Workplace pension, due to level of their earnings or they have opted out as they feel they cannot afford the contribution, due to low incomes.  If incomes are low then the contributions could be low, even as low as £ 1.00 per week.  Now this premium is not going to enable you to retire on but it is a start.  My grandmother use to say “ look after the pennies and the pounds will take care of themselves”, there is a lot to be said for the older generation’s wise words.  

Pensions are so amazing and have so many benefits, which I intend to enlighten you on over the coming months. Watch this space.....