Just relying on your state pension in later life could leave you suffering a threadbare retirement. The current State Pension stands at just £185.15 a week, as of December 2022.
To make sure you have a more financially successful retirement, it pays to put things in place now. Firstly, make sure you have an alternative pension provision.
Employment Law since 2008 has made it a legal obligation for employers to automatically enrol staff into a workplace pension scheme and contribute towards it. If you have left one job and started another you will need to re-enrol with your new employer.
You may have several small pension pots dotted around from different employers. There are options to consolidate this in one pot. It is important to seek professional advice before considering this option, as fees may be payable.
If you are self-employed, you need to make sure you keep your National Insurance Contributions up to date. You will need at least ten years’ contributions to get some amount of State Pension on reaching retirement age.
And you will need a total of 35 years of contributions to claim the full State Pension upon retiring. If you do not have sufficient years accrued, you can make voluntary contributions to make up the difference.
However, what is just as crucial, is to set up some sort of private pension, to offset your later life living costs.
Up to £40,000 of tax relief per year is also available on pension payments and this could help to reduce the amount of income tax you pay while working.
There are many ways to set up a private pension for the employed and self-employed. For more guidance and advice on how to maximise your pension options, get in touch with our wealth management team and we can introduce you to a pensions expert to help you put in place retirement plans to meet your future needs.