Retirement may still seem a long way off, especially if you are under 50, and there may be other things competing for any extra money you earn –holidays, children heading off to university or supporting elderly relatives –but putting money away into a pension is just as important.
What are the benefits of a pension?
Pensions are a tax efficient way of saving for your retirement. You don’t pay income tax on the money you pay into your pension or on the amount it grows. You can also take a quarter of your pension pot as a tax-free lump sum when the time comes to retire. It’s worth remembering that tax treatment depends on your individual circumstances and these rules may change in the future.
How do I save for my retirement?
The most popular pension route is to invest in a pension. You can either set up a private pension yourself, or pay into a workplace pension scheme set up by an employer. If you pay into a workplace pension scheme, the amount you choose to contribute is often met by the same contribution (up to a set limit) by your employer – so your savings grow even more quickly.