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Why a Pension is a Great Savings Option For You

By February 28, 2023March 6th, 2023No Comments

Retirement might seem a long way off, but you’re never too young to start saving into a pension.

Here are just a few reasons why…

Build a safety net for the future

If you’ve been given the chance to join your employer’s workplace pension, it’s really worth it because it can be worth considerably more than the state pension (currently £185.15 a week, and going up to £203.85 a week in April).

Since the size of the state pension and the age at which you can receive it is subject to change, it’s worth thinking about how much you live on today, so you can get a good idea of whether you may need more than the state pension later on.

Tax relief

If you’re saving into a pension scheme, you can get tax relief on your contributions, with money going into your pension pot rather than to the taxman.

The amount of tax relief you get will be based on your income tax rate, and you can get relief on private pension contributions worth up to 100% of your annual earnings.

Get extra money from your employer

If you’re 22 or more and earn at least £10,000 a year, you’ll be automatically enrolled into a workplace pension by your employer.

Significantly, your employer makes a contribution, so you’re basically getting free money.

Retire when you want to

The government has the power to change when a person is eligible to receive the state pension.

By putting your own pension provision in place, you’ll be in a stronger position to retire at a time of your choosing.

The power of your pension grows over time

If you start saving early, your pension has more time and potential to grow, so it will be worth much more in the future.

No other savings option gives you so much for so little.

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Pensions should be part of a wider savings plan

Taking money out of your pension can affect its long-term value, and you can only take 25 per cent of your pension savings out of your pension tax-free, with the remaining 75 per cent being taxable as income.

With this in mind, it’s really important that your pension forms part of a wider savings plan.

You could, for example:

  • Join your workplace pension scheme
  • Put money into a savings account
  • Set up various investments

That gives you the best of both worlds – confidence that you’re building a healthy pot of money for the future and the ability to make your money work hard for you right now.

It’s never too late to get started with pension saving, but the earlier you do, the better.

You don’t have to lift a finger to get started, as your employer and Creative Pension Trust can take care of everything for you.

Find out more here

Take charge of your retirement planning with the Creative Pension Trust Member Portal.

Log in here.
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