All the rumours about pensions debunked
I can take my pension before I am 55?
The normal minimum pension age has been 55 years of age since 6 April 2010. People are usually allowed to receive their pension payments from a registered pension scheme when they are aged 55 or older.
I’m too young to start a pension?
You’re never too young. Like most things in life, you get what you pay for. If you want a good income for when you enter retirement, the sooner you start saving, it will be better for you, as you can spread the cost over a longer period and your money will have time to grow.
Pensions aren’t a good way to save for retirement!
They are great saving methods for when you decide not to work – that’s what they’re designed for. You also can get tax relief on your savings contributions and, in many cases, if you save through a Company Pension Scheme, you benefit from valuable contributions from your employer.
We’re not saying a pension is the only way to save – there are other ways but they aren’t all tax efficient.
I can’t afford it!
If you earn £24,000 annually and pay 5% towards your pension, you will get £100 every month – but you’d only pay £80 of this if you’re a basic rate taxpayer (and less if you are a higher rate taxpayer).
I’ll be fine – the State will look after me!
Will it? The basic State pension is around £102 a week. How far will that go? And even if you can be able to pay for essentials, don’t you want to have enough left to enjoy your retirement to the full? People are living longer than ever before; this could mean another 20 years or more after you stop working. Make sure you can live the life you want
My house will pay for my retirement!
It could do – but you still need somewhere to live. Real estate has indeed been successful, but things aren’t looking quite so rosy now. How can you be sure that your house will be worth enough when you retire?