Recent data from the Office for National Statistics shows that the median value of private pensions in the UK stands around £57,000.
As most people take out the 25% tax free cash of £14,250 this would only leave enough for a guaranteed income of around £127pm*. Whilst most people tend to spend less money in retirement, £127pm is around 6% of the current national average earnings.
* Based upon a male and female aged 65 with benefits escalating at 3% and provision for a 50% spouse’s pension
It’s never too early or late, for that matter, to consider your retirement planning. There are many ways to save for your retirement and these can include:
Pensions can be broken into two main categories, Defined Benefit or Final Salary pension schemes (DB) or Defined Contribution Schemes (DC).
Defined Benefit pensions are pensions that offer a guaranteed income from a particular age until you die. They have many valuable benefits that are often not available through Defined Contribution (DC) style pensions. Depending on the scheme rules, these can also include benefits for your spouse or dependent, generally upon death.
Defined Contribution Pensions. DC schemes come in a variety of different names, but essentially, the value of the plan is defined by the contributions you pay in and the types of investments your money is invested in.
Types of Defined Contribution Schemes:
Workplace Pensions (Auto enrolment scheme, Group Personal Pensions, SSAS etc)
A workplace pension is available to all employees so long as they meet the minimum criteria:
- You are classed as a ‘worker’
- Over the age of 22
- Earn at least £10,000 a year; and
- Work or normally work in the UK
Unless you opt-out, you will be auto enrolled into your companies pension scheme. Along with your contributions, your employer will also contribute. Under current legislation the minimum gross payment from your employer is 3% of your salary and from yourself it will be 5%. A total of 8% Gross of your salary each year is therefore paid as a minimum.
Personal Pension / Stakeholder Pension
A Personal Pension is a pension independent to your employer. You may start a personal pension at any point or could have had one running for many years. Contributions are usually paid by you or other people you know, but in some cases your employer can also contribute to these plans too.
Self-Invested Personal Pension
These types of plans are very similar to personal pensions but in some circumstances can be a little more elaborate and complex. SIPPs can generally offer much wider investment choices as well as flexibility.
We can cater for all pension enquiries for both individuals and companies. If you would like to know more about how we can help you plan for your retirement, or the retirement of your staff then please get in touch.
We're located in Wakefield
Athelward Suites East & West,
Estate Yard, Nostell, Wakefield,
WF4 1AB
Opening Hours
Monday - Friday: 9am - 5:30pm