Pension Awareness Day 2017

Pension Awareness Day 2017

Friday 15th September is annual Pension Awareness Day 2017 in Britain. The campaign was launched in 2014 with the aim of preventing the nation from walking into pension poverty and alerting us to the fact that most of us are not saving enough for retirement. It’s hoped the campaign will help us understand how much we’ll need for retirement and how best to reach that goal, so that we can maintain a comfortable lifestyle.

The Pensions Awareness Campaign also hopes to encourage the financial industry, employers, businesses and the Government to share ideas on how best to help people prepare for their financial future and increase their retirement saving.


Benefits of Saving into a Pension

  • The key advantage of saving into a pension is that we benefit from tax relief, so the growth is mostly tax-free.
  • Once enrolled into a workplace pension our employer will usually pay in the same amount or more, essentially doubling our pension funds.
  • When you reach 55 years old you can take up to 25% of your pension pot as a tax-free lump sum.


Understanding Pensions

A pension is a long-term savings plan that provides us with an income in later life or if/when we choose to retire. There are three main types of pensions:

  • State Pension
  • Company or workplace pension
  • Private pension (also know as a personal pension)


State Pension

Most people are entitled to the State Pension. This is a regular payment from the Government that we’re entitled to once we reach State Pension age. It’s a secure payment that we’ll receive for the rest of our life and increases by at least the rate of inflation each year.

The State Pension is funded by the National Insurance contributions (NICs) we’ve paid throughout our working lives. You must have 35 years NI record to be eligible for the full State Pension.

To find out when you’ll reach State Pension age and how much you may get click here to visit Government website.


Company or Workplace Pension

A company or workplace pension is a pension set-up by our employer. This pension is funded by regular contributions from our salary, our employer and the government in the form of tax relief.
Since the government brought in the ‘automatic-enrolment’ scheme, employers have to enrol their eligible employees into a workplace pension scheme, though staff can opt out if they wish. The scheme is gradually being phased in, but all eligible employees must be enrolled into a workplace pension by October 2018.


Private Pension (aka Personal Pension)

A private/personal pension is a defined contribution pension scheme and is usually something we arrange ourselves or with the help of a financial advisor. It’s funded by contributing regular monthly amounts or a lump sum to a pension provider, who invests it on our behalf. Contributions receive tax relief. Its value will depend on the investor’s charges, how the investment performs and the amount contributed.


If you are interested in setting up a private pension or investing for later life, ADN Financial Solutions can advise you on the best options available. To arrange a free consultation please call us on 02392 822 616.


Please note: The value of investments and pensions and the income they produce can fall as well as rise. You may get back less than you invested. There are regulations in place that minimise risk, but how your pension is protected will depend on the type of scheme.

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