You are 55 years old, employed, and your pay falls into the Basic Rate of Income Tax. Your pension pot is currently £10,000 and you pay into your Creative Pension Trust account every time you get paid. Your total regular contribution is £150 per month, with £93.75 coming from your pay and an additional £56.25 coming from your employer.
Because your employer pays into your pension every time you do, and you receive tax relief on your pension contributions because you are a Basic Rate taxpayer, you are able to save £150 per month towards your retirement for just £75. No other savings account is as efficient for your long-term savings as a workplace pension.
|Cost to you (credited from your pay packet)
|Plus your tax relief*
|Total regular saving into Creative Pension Trust
|Plus your employer’s contribution
|Total saved into your pension for your £75
Since you are effectively able to double the value of your contribution every time you pay in, you choose to retire on your 65th birthday. Assuming you maintain the same contribution, this would give you an additional £18,000 to enjoy during your retirement, excluding any investment performance.
*Allowances, limits and tax bands are set by the Government and subject to annual review. All information provided is based on current legislation and HMRC rules, which are subject to change.