We all look forward to a quieter time in life, a time when we can put our feet up and really reap the rewards for the hard work we’ve put in during our youth. Maybe, when it comes to your turn, you can enjoy some luxury holidays, take up golf, be a person who lunches, do all the things that you couldn’t do when you were too busy working. However, to do all these things, you are going to need money and your state pension might just not cut it. If you want to live well in retirement you need to start thinking about your saving options. Read on to discover some of the best ways you could start to save for your retirement.
Work Place Pension
We will all receive a state pension from the Government, but we can also join a pension scheme operated by our employer so that we are more comfortable during retirement. Contributions towards this type of pension are usually collected straight from your salary, so you won’t miss the money and your employer makes a contribution too. In fact, many employers pay between 3% and 10% of your annual salary straight into your retirement fund. Any money that you pay into your pension isn’t taxed, so joining your employer’s pension scheme can also be a great way to save on your tax bill. Any employee over the age of 22 should be offered the chance to join a workplace pension scheme, so check with your employer to see what options they have available to you.
You aren’t just limited to workplace pensions, however. It is also possible to shop around and take out a private pension. With this type of pension, you pay a monthly contribution to the provider that you have chosen, and they will invest it on your behalf. You can often choose from a range of investment funds as well as change your monthly contributions according to your financial needs, so you have more flexibility than you do when paying into an employer run scheme. You could, if you wish, set up both a workplace pension and a personal pension to take advantage of the contributions from your employer alongside the flexibility of a personal pension.
ISAs are another option available to you. A Lifetime ISA, for instance, allows you to pay in up to £4000 per year. Every year up until the age of 50 you will receive a 25% bonus from the Government on whatever you have paid into your account that year, that’s an extra £1000 every year if you manage to save the full amount allowed. This bonus even counts when the interest calculation is performed, so you will earn money on this too. You can also use this ISA to save for a deposit for your first home and then carry it on to build up a retirement fund if you wish, but if you remove money for reasons other than retirement or for purchasing a home you will have to pay a penalty of 25% of the amount that you withdraw. You have to be aged between 18 and 40 in order to open an ISA but it can be a really great way of making sure you have enough money to enjoy yourself in retirement.