A Quick Guide to Your Pension

How to retire at 55 – Eight top tips on early retirement

Retiring early requires commitment and dedication to save and not spend when you’re young and still working. Those planning to retire early have to save more from their shorter working lives. For instance, a person who retires at 65 may perhaps work for 44 years but be retired for 20 years; however a person who retires at 55 might work for 34 years and then be retired for 30 years.

Below are top seven tips on how to retire at 55.

 1. Claim your own share of the £35 billion the taxman gives pension savers.

Whenever you put money in a personal pension the     taxman chips in as well. When you put in £1,000, the taxman adds an additional £250. However if you pay the 40% or 45% tax rate, you will get a far better deal.

2.  Start a pension – the earlier the better

It seems obvious; nearly four in ten British adults tend not to have a pension, including 1.4 million that are within a decade of retiring. To determine approximately how much you ought to save on a monthly basis divide your age once you start saving by two and give back this sum as a portion of your earnings.

 3. If they offer you a pension at work, take it!

Businesses, particularly the big ones, generally offer workplace pensions. Oftentimes, they can as well pay money into your pension. UK companies have to offer a pension to their employees therefore you could lose out on ‘free money’ should you opt out.

 4. Check where your pension is invested

Do you always check out the worth of your home? – Even though you have no plan of selling?  It’s natural; your home is among one your biggest assets, the same as your pension. Do you have any idea where it’s invested? Disturbingly, close to half of Britons have no clue.

Ensure you know where your pension is invested as not all investments are the same and the difference can certainly impact your pension a great deal.

5. Make small, regular increases – they could go a long way

How much money could you get if you raise your contributions by just 5% annually? Take a look at projections to see how much more you could get by making little raises now.

6. Track down old pensions

Few people stick to the same employer for life – the average is 11 jobs in an entire life. And even lesser people keep an eye on all the pension schemes they have signed up with in the course of their career. Some estimates prove that the total of unclaimed pensions is within the scale of billions.

If you joined multiple pension but don’t have the details, it is possible to trace them for free with the Pension Tracing Service.

7. Approaching retirement? Ensure you know about the new options

Deciding on how to draw your pension is truly one of the most crucial financial decisions you need to make. You might have to depend on it for 20, 30 or even 40 years. Before you decide how to take your pension, it might pay to learn about the new rules and opportunities.

There is now a lot more flexibility over the way you draw your private pensions – it is possible to take lump sums, income or a combination. You could take your pension fund as cash in one go.