The 5 Basics Of Pensions

It’s already a given that your pensions will serve you post-employment. You’ve worked so hard to gain that financial freedom you wanted to achieve as your tenure in the corporate world ends. But with the financial crisis shooting down interest rates for economic growth, many retirees of today need to keep up with their pensions.

So, to make things easier, here’s the 5 things you need to know about pensions right now.

  1. Basic

You have a basic state pension in the form of a £113 weekly income for a single person. This is paid out by the government to women aged 62 and men aged 65. State pension is quite small and you’ve funded this throughout your lifetime through your National Insurance contributions.

  1. Advanced

There’s no advanced pensions coming for you, so to say. An advanced pensions fund is a tax-free asset that you could use to further your basic state pensions. By utilising several forms of tax reductions and allowances, you could further inflate the value of your fund.

Advanced pension could be a personal pension pot where you contribute another percentage of your income. You could also sell the cash to an insurance company for regular income by the end of your employment.

  1. Child Benefits

If your pension allows your net salary to dip below £50,000 annually, you can keep your child benefit. If you’re earning more than £50,000 excluding your pension payments, then you’ll be stripped of an annual allowance of £1752.40.

  1. Scams

Pension review companies are sprouting everywhere after the government had approved pensions reinvestment to wherever. With the ability to invest anywhere and everywhere, companies want to swindle your hard-earned cash from your hand. Always be wary of such.

  1. Start As Soon As You Can

Always start your pension as soon as you could. If your employer offers you pensions, take it immediately. It can be seen as a form of pay rise, or the employer may give you an actual pay rise.

As a bonus, your employer may double or triple the size of your pension pot over time.