There are many types of pensions available in the UK, making the financial preparation process in the lead up to retirement a confusing ordeal for many people all over the country.
As leading financial advisors in Lancaster, we can help you to understand what you are entitled to when you retire, and here we shall present an overview of the two key pensions that are available in the United Kingdom.
The State Pension is paid to those who have reached the appropriate State Pension Age and contributed enough money via National Insurance payments (NI) throughout their working life.
This pension is a benefit that is based on your contribution to society through NI payments, which will have been taken from your wages each time you were paid by your employer. The Basic State Pension is increased every year in April, and is made payable to pensioners who qualify for the pension.
The State Pension Age (SPA) is determined by the State Pensions Act, which dictates at what age men and women can claim their pension. Presently, the State Pension Age is being increased from 60 to 65 as laid out in the State Pension Act 1995. An independent financial advisor can help you to find out if you are eligible for the State Pension and give you an estimate of how much you can expect to receive.
While the State Pension will provide you with an income that will cover your most basic needs when you retire, a workplace pension will offer you more financial security throughout retirement.
The laws surrounding workplace pensions have been recently changed, and employers who do not currently offer a workplace pension scheme will have to do so by law over the next few years. Beginning with the largest organisations in the country, employers will have to automatically enrol all eligible employees into these schemes.
Workplace pension schemes are not compulsory for you to join, however it is a good idea to join in order to secure your financial future. Workplace pensions vary from employer to employer, so you will need to do your research and consult your financial advisor to find out what you are entitled to.
We hope that you found this information helpful. Here at Burton and Fisher, we help many of our clients prepare their finances before retirement, and if you are unsure about your pension, we can assist you. For more information on our pension services, contact us today by calling 01524 416872.