Pensions are something that many people don’t start to think about until it’s too late. After all, most of us have more immediate things to be saving for, whether that’s a home, a car, or an unexpected boiler repair. But starting to save for your pension sooner rather than later will save you a headache or two further down the line.
So how should you start saving for your pension? Luckily, there are lots of ways to get going on this all-important journey, and you don’t just have to pick one.
Private Pensions
Opening your own private pension can help you feel more in control over your savings. You’ll be able to choose how much goes in and easily check up on what you’ve saved. Private pensions at Wealthify can help you to reach your savings goals with their handy calculator add-on. This means you’ll know if you’re on track to a more comfortable life when you’re no longer working.
It is important to remember that with private pension plans, there is an element of risk. As your money is invested, there is the chance that you may not reach your goals in the time you expect. However, private pension plans will offer better growth than normal savings accounts, which typically have low interest rates.
State Pension
If you make national insurance contributions, then you’ll be entitled to a full or partial state pension, depending on the number of years you’ve worked. While the state pension is unlikely to offer the quality of life you’re looking for, it can complement a private pension to top up your retirement income.
When you’ve had gaps in your work history, it can be worth topping up your national insurance contributions on a voluntary basis. While that means paying out some of your hard-earned cash as a lump sum, it could help you be more comfortable in your later years. Whatever you decide to do, it’s important to find out how much money you have contributed to know where you stand.
Workplace Pension
Many workplaces have a private pension scheme for their employees. This might mean that when you make a contribution from your salary, your employer also contributes a percentage to boost your savings. If you’ve changed jobs a few times, you could have a few different pensions you’re not aware of. This can make it difficult to keep track of your money, so you might want to consider moving all your pensions into one place.
Private Investment
If you prefer to take matters into your own hands, you could consider investing privately in companies on the stock market. This is the option that carries the highest amount of risk, but also has the potential to reap greater rewards. You’ll be able to manage your money yourself, meaning it’s your responsibility to make wise investments. Make sure you’re well-informed before taking the plunge and start with smaller amounts if you’re feeling at all hesitant. You could even consult a financial advisor to help you make the safest decisions.
