Saving for later life - pensions
Your retirement income is made up of the State Pension, your workplace or private pensions, plus any additional savings you may have.
Get to know your pension and you can feel more secure about your future.
State Pension
The State Pension is a regular payment from the government that you can claim when you reach your State Pension age. Getting to know your State Pension can help you plan ahead for your retirement.
The amount you receive is based on your National Insurance record. In 2019/2020 the full rate of new State Pension is £168.60 a week – that works out at over £8,750 a year – but not everyone will get the same amount.
Visit www.gov.uk/check-state-pension to find out what you could receive, and the earliest you can claim it, under the current rules. This service also shows you your National Insurance record. You may be able to improve your forecast by filling gaps in your record.
Your State Pension is a good foundation, but you should consider how much you need to save for the lifestyle you want when you retire, and think carefully about saving for your future. Find out more at www.yourpension.gov.uk
State Pension age is regularly reviewed and can change, so it is important to check it.
National Insurance Contributions and Credits
Most people pay National Insurance contributions when they are in work.
You can also get National Insurance credits if you are claiming certain benefits. You may be eligible if, for example, you receive disability benefits, are a carer or are bringing up children.
Many of these are given to you automatically but others need to be applied for.
For more details on how to apply, visit www.gov.uk/national- insurance-credits.
Checking your State Pension can help you identify gaps in your record. If there are gaps, you may want to make voluntary National Insurance Contributions to fill them.
Pension Credit
Regardless of gender, if you’ve reached women’s State Pension age and your weekly income is less than £163.00 (for single people) or £248.80 (for couples)* you may be able to get extra income from Pension Credit. Visit www.gov.uk/pension-credit to check if you’re eligible and what you might receive.
* These amounts may be higher for those who are severely disabled, have caring responsibilities or certain housing costs.
Workplace Pension
A workplace pension is an easy way to save for later life and the earlier you start, the more you’re likely to have when you retire.
Whether the employer you work for is large or small, even if it is just you and your boss, you could benefit from a workplace pension.
Get to know the benefits:
1. Saving into a workplace pension is easy: if you are eligible you
don’t have to do anything as you will be automatically enrolled into a pension by your employer.
2. When you pay in, your boss pays in too.
If you don’t save into a workplace pension when you get the chance, or you choose to leave it, then you’re giving up this extra money from your employer.
For more information visit www.workplacepensions.gov.uk
Pension Wise
Pension Wise is a free and impartial government service. It can help you understand the different ways you can take your pension pot.
Your are eligible for a free guidance appointment if you are over 50 and have a defined contribution pension (not a final salary or career average pension).
A defined contribution (DC) pension is a personal or workplace pension based on how much you, and possibly your employer, have paid into your pension pot. With this kind of pension you decide how to take your money out.
You can have your appointment with a Pension Wise guidance specialist over the phone or face-to-face in hundreds of locations across the UK. All guidance is impartial – our specialists won’t recommend any products or companies and won’t tell you how to invest your money.
Book your free appointment by calling 0800 138 3944 or go to www.pensionwise.gov.uk and get to know your options.
How well do you know your pension?
Is it worth saving into a pension?
Most people can expect to get back more in retirement than they put into their pension. Most people saving into a workplace pension also benefit from contributions from their employer and the government in the form of tax relief (which means some of your money that you would have paid as income tax goes into your workplace pension instead).
Will the State Pension be enough?
The State Pension is the foundation of retirement savings and for many people, relying on this alone could mean a fall in income upon retirement. Saving into a workplace pension means people will have more money to continue doing the things that they enjoy when they retire.
Retirement seems like a long way off - is it too early to start saving?
Although retirement might seem like a long way off, it’s never too early to start saving. Saving through a workplace pension is easy and, if you are eligible, you don’t actually have to do anything because your employer will enrol you. The earlier you start to save, the more money you are likely to have when you come to retire as your money has time to grow.
Further information
www.pensionwise.gov.uk
You can get further information on pensions and savings from:
www.moneyadviceservice.org.uk
Information correct as of April 2019
www.yourpension.gov.uk
www.workplacepensions.gov.uk
www.pensionsadvisoryservice.org.uk