Saving now to protect your future

| June 18, 2015 | 0 Comments


Being in your 20’s and thinking about retirement can seem like an eternity away and the temptation to think “I’ll wait until next year or the year after can be all too tempting. The reality is next year becomes the year after and time rolls on and before you know it you are knocking on the door of your 40’s. With that and the more immediate need for young people now of trying to get on the housing ladder the difficulty comes with knowing where to put your cash.

So like it or not we really do have to start thinking about pensions on top of saving for a deposit on a house or flat and the everyday temptations like “how great would that pair of jeans look?” It can be a daunting task – who, when, why and how much are all questions that when you are young and inexperienced will be whizzing around your mind.

Seek advice

Like mortgages, savings and investments the sheer scale of products out there can be mind boggling. Which one is right for you and which will give the best return on investment though? First of all you need to seek advice. Traditionally there were High Street Independent Financial Advisors that you could go to and sit down with at a price and then end up walking away with a product that you may not have necessarily understood but were told you needed. Times are changing though and we are more time poor. With many of us transacting online for as much as possible enter the new digital only companies like Nutmeg. They offer an online pension pot calculator which allows savers to get a handle on what’s required to reach certain goals and set up their pension with the help of an advisor in as little as 10 minutes.

What is a pension?

In a nutshell it’s a savings account for the future. You save an amount of money each month and then when you decide to retire and access your pension it continues to provide you with an income when you are no longer receiving a salary. The value of a pension can rise and fall over time so it is important to consider this when working out how much you will need to save in order to have a sufficient pension when you do retire.

Which pension?

There are all sorts of things to know when considering the right pension for you. There is the basic state pension that everyone is entitled to as long as they have made national insurance contributions throughout their working life. Then there is the workplace pension which you may have access to via your employment whereby you pay in and your employer makes contributions as well. Most workplace pensions are not as rewarding as they used to be with final salary pensions closing during the financial crisis. Finally there is the personal pension which the individual pays into themselves. The personal pension comes in many different forms starting with the investor putting in a basic lump sum and adding to this or transferring existing pensions into one pot.

Whichever route you decide on it is important that you seek the right advice and get the right product that meets your needs.



Category: Student News

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