Pension Awareness Day – why saving for the future early is so important

Pension Awareness Day takes place annually on the 15th September and aims to address the challenge the UK is facing – we are not saving enough for the future.

We all have our own vision for how we want to spend our retirement. But how many of us actually know, or understand, just how much we need to save in order for our vision to become a reality?

Why saving for the future early is so important

A person on the UK average salary of £27,000 now needs to build up a pension pot of over £300,000 to be able to maintain this level of income in retirement, new analysis has shown.

Yet, despite auto-enrolment, where most workers and their employers pay towards a pension each month, the average pension pot in the UK remains around a sixth of what is actually needed.

Coupled with the fact the UK population is ageing with many people’s retirement lasting for 30 years or more and the uncertainty over the future State Pension age, it is now more important than ever that you start planning and saving for your retirement early so you can have the lifestyle you want during your retirement.

About pensions

For many, contributing to a pension remains the most tax efficient way to fund your retirement. Your pension grows largely tax free, you’ll benefit from tax relief and you can take 25% of your pension pot as a tax-free lump sum when you reach age 55.

Most of us would agree that pensions might not be the most entertaining topic to talk about, so Pension Awareness Day also tries to encourage people to ask questions and start thinking about their pension.

We know that pensions and retirement planning can be complex. And for those whose retirement is a long way off, it is all too easy to put it to the back of your mind and ‘worry about it later’. But whether your retirement is 10, 20 or 30 years away, it’s important to plan for it now.

Deciding when and how to save for your retirement is one of the most important financial decisions you’ll ever make, so it’s important that you get it right.

If you would like pension advice or to learn more about retirement planning, our expert financial advisers can discuss your options and work with you to put a personalised plan in place. Contact us today to book a no obligation initial meeting at no cost to you.