When you're saving for your retirement, there are many things you have to keep in mind. For example, will you be paying rent or a mortgage on a property by the time you retire? Will you want to be going on holidays? How much will the general cost of living be by then? These are all things you must consider every time you pay into your pension scheme.
For those of you who are feeling the pinch, we finally got some good financial news this year – the government recently announced that the annual pension maximum payment has been increased to £60,000 per year. That is up from the previous £40,000, above which any extra payments had resulted in additional charges over the last nine years.
But the scheme does have its critics. The main controversy is around who this pension increase benefits in actuality, with some arguing that the rise in the payment roof only sets to make the rich richer, offering no positives for those on a lower income. Additionally, some have suggested that the entire system change is aimed purely at keeping more NHS doctors in work for longer – currently, many doctors are able to save adequately to begin retirement in their 50s, leading to a loss of skill within the NHS - and is "using a sledgehammer to crack a nut". There is some worry that this decision could lead to high income earners reaching their savings goals quicker and afford them the ability to retire even sooner.
Nonetheless, it might be helpful to take advantage of the new rules and pay in extra wherever you can – speak to your financial adviser to see if this is a good idea for you. Have you read our article on investing for your retirement?
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It's never too early to start planning for your pension. With the cost of living expected to rise year-on-year, the sooner you start saving and investing for your retirement, the better. If you'd like to speak to a member of our expert team to get tailored financial advice just for you and your family, give us a call on 01283 777014 or click here to fill in our enquiry form.
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