The subject of pensions can sometimes seem like a mind-boggling one. Percentages, dividends and all them figures can be enough to make the brain burst! After all, rules seem to change all the time and it can seem like a lot of work to keep on top of new and constantly changing regulations. We have discussed pensions before, such as with our article that debates the possibility of saving £22,000 for your retirement, as we believe it is an important topic that shouldn’t be brushed under the carpet.
For this reason, we also believe that it is important to keep up with recent news about this subject – right now, it appears that British workers are missing out on a pension offer that might make their lives much easier in the future:
Matching Pension Contributions
According to a recent article, millions of workers in the UK, similar to yourself are not taking advantage of a contribution-matching scheme that could give you a whopping £650 extra each year. That’s equivalent to decent jet-setting trip away or even a nice pot of savings for later on in life. The number of people who may be missing out is a surprising figure: a huge 3.2 million who work for larger employers could have the chance to earn an extra bit of cash at the end of the year.
Usually, staff pay a standard percentage of their salaries into a pension pot, with their employer paying in as well. There is the option in larger companies, however, of a valuable additional matched contribution. This is available if the worker chooses to save more than the minimum.
The example found in this article is simple and includes a very famous UK business: Tesco. Employees can contribute 4% of their wages, which is matched by a 4% contribution from Tesco. Workers can contribute more if they desire and the company will match their contribution up to 7.5%. The proof is in the percentages!
What Does This Mean?
By taking advantaging of schemes such as these, you are essentially ensuring a stronger retirement for yourself. Many people consider 15% of wage contribution to be the right amount needed for an average retirement fund, so ‘the more the merrier’. If you earn £18,000 a year that’s only £2,700 a year out of this. If you consider what it is going towards, it’s not too much, right?
This means that you can build a stronger pension fund for yourself– many workers, however, are not aware of the scheme in the first place, or are not sure whether they can benefit from it. This is often since some companies are better at advertising this scheme than others. Don’t shy away from asking your employee or financial adviser what your options are.
Royal London says that this can make all the difference. If someone chooses to have an additional 3% employer-matched contribution, their income in retirement will be around £3,500 a year higher than another worker who only contributed the minimum.
Is Everyone Eligible for This Scheme?
Only employees working for larger companies can end up making a higher contribution and receiving a matched amount. While not all businesses will offer the scheme, if you are aware of these opportunities you are able to take advantage of them, and in the long run, build a better and stronger retirement fund pot! If there’s even a slight possibility of you retiring to a villa in the Maldives you want in, right?
If you are unsure about new or altered pension rules and regulations, as well as schemes, we are here to help. We understand that your future is serious business, and your pennies are our priority. It’s never too soon to start investing in your pension, so contact us or give us a call on 01524 416511 and we will be able to offer pension advice in Lancaster. Everyone wants a piece of mind for the possibilities of the future and we like to think we can put your mind at ease. Especially if you do end up sunning it up in the Maldives for retirement!