We all look forward to a happy and fulfilling retirement, but with life expectancy increasing, it is vital that we start planning as early as possible to ensure that we have sufficient income to meet our needs and maintain quality of life throughout retirement.
You are contributing towards a state pension through National Insurance Contributions, but it is generally accepted that the state pension alone is unlikely to provide a sufficient income during retirement. Nowadays we are living longer and expecting more of our retirement years so we need more money than previous generations once did.
That is why many people choose to enhance their State entitlement with another pension - through a scheme set up by their employer, or with a personal pension. Either way, the money is invested by their pension provider on their behalf with the aim of building up a more substantial sum for retirement.
If you decide to start a pension plan, there are a number of important decisions you will need to make. These include how much you should pay into your pension, where your payments are invested and what you can do with any existing pension plans that you have.
Considerations include:
Occupational Pensions, where your employer contributes should generally be taken as a starting point to retirement planning. For the self-employed, those without access to a company scheme, or who want to make more provision, personal arrangements can be made. You may want to consider transferring a pension from a previous employment into a personal arrangement.
Private Pensions come in various guises; Personal Pensions, Stakeholder Pensions, SIPPs and Executive Personal Pensions, but which one is most suitable for you? A SIPP is a personal pension that offers you the widest range of investments to choose from including residential property.
Investment Vehicles of all kinds can contribute towards providing income in retirement, from property, National Savings, stocks and shares through to equity based investment plans.