Starting a new job? You really should consider a pension
If you think you're too young to look ahead to retirement, think again.
It’s inevitable that there will come a time when you can't work any more but still need an income.
Even if that seems a long way off, when you're saving for your future the earlier you start the more flexible your retirement options
We're all living longer, and if you expect to be around at the age of 85, you should plan for an income covering over 30 years. You may of course live longer – and you wouldn't want the money to run out, which means getting good advice is key.
When you start a new job, the chances are that your employer will offer a workplace pension scheme. By 2018 all employers must provide such a scheme.
Your employer must automatically enrol you into a pension scheme and make contributions to your pension if you are aged between 22 and State Pension age, earn at least £10,000 per year and work in the UK, unless you choose to opt out. This is called auto-enrolment. They have to make an offer to eligible employees but if your company doesn't offer you a workplace pension, you can still ask to join but they may not have to contribute to the fund.
A percentage of your pay is put into the pension scheme automatically every payday. In most cases, your employer must also pay money into your pension – and you may also get tax relief from the government.
But should you pay more – or perhaps set up a separate fund?
You may feel that such planning for the future is unrealistic when regular bills, school uniforms, paying back loans and your mortgage take such a huge chunk out of your income.
But saving for your pension is more important – and easier – than you may think.
Financial adviser Barrie Storm, from our own partners Wren Sterling, said: "If you actually sat down and did the sums of how much you need to enjoy a comfortable retirement you may be quite shocked, hence the need to start early.
"Retirement planning is not some complicated and boring process that should be put off. It's a savings scheme with tax advantages.
"The downside is that you can’t touch your pension pot for some time. That’s because a pension is simply a way to save for your future, and is why the government is keen to contribute."
And if you have just started a new job, with an improved salary, the time might be right to stash away a little of the extra before you start to miss it.
It may help to talk things through with a financial adviser like Barrie, even if you've had a pension for a while, or if you're at the very start of your pension journey. Seeing a financial adviser will help ensure that when you want to retire, you have the funds to enjoy life.
We believe Wren Sterling are the perfect choice to provide our customers with expert financial advice. They offer a no obligation appointment and are fully authorised and regulated.
Call or pop into your local branch to arrange an initial meeting.