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Only one in three adults in the UK are currently saving towards their pension, meaning many are facing an extremely uncertain future as they approach retirement. Our guide features the nine big questions you need to know about pensions but have never got round to asking.

1. At what age should I begin saving?

There is no fixed age from which you should start saving, but by setting money aside as early as possible it will give your pension pot time to grow. So generally, if you are working, you should be saving in a pension.

2. How much do I need to save?

Hopefully, you will be mortgage-free when you retire and any children will no longer be dependent. You will have more time on your hands for holidays, but the bills still need to be paid to save an amount that is affordable now. With informed retirement planning, you won’t need to link your retirement to the state pension retirement age. Whatever that might be in the future. You should be in a position to choose your own retirement age.

3. What is a pension?

A pension is a way of saving for retirement. It’s a tax efficient pot of cash. You can pay into it and so can your employer, whilst you get tax relief on your contributions. Pension plan Flexibility means you can increase or decrease your savings or even pay in lump sums.

4. What is auto-enrolment?

Not all companies offer workplace pensions and currently fewer than one in three UK adults are contributing to a pension, but auto-enrolment is designed to address this. Auto-enrolment rules mean that employers will have to offer a pension scheme to all eligible staff by 2019, and employers have to contribute. However, individuals can opt out.

5. Will this be the right pension for me?

Firstly, auto-enrolment only applies to employees so the self-employed need to seek expert advice. Secondly, it depends heavily on an employee’s individual circumstances. Age, date of preferred retirement, any existing plans and what level of income is needed.

6. Where can I get expert advice?

At Edward Mellor, we have spent more than 30 years looking after our clients’ ongoing financial needs. We aim to provide exceptional service and build long-term relationships. We believe that such important things are better-discussed face to face.

7. What are the risks?

Investing in a pension carries an element of risk. However, at Edward Mellor, we can tailor your retirement savings to suit your own personal attitude to risk. Pension saving is a tax efficient option that isn’t implicitly risky. The risk comes from the investment choice.

8. Is a pension really worth it?

The massive boost to a pension is the tax relief provided. If you are a 20% basic rate taxpayer, a 40% higher rate taxpayer, or a 45% additional rate taxpayer, you can gain tax relief automatically at 20%, with a higher rate and additional rate taxpayers getting an extra 20% and 25% via self-assessment. Even nil rate taxpayers can benefit from 20% tax relief. The level of tax relief is subject to your annual net relevant earnings capped at £40,000.


Who can I talk to?

Contact our pensions expert, Paul Brassington, today on 0161 443 4555

for an initial chat to answer your pension questions.

Enquire Today – Get Paul to Call

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