It’s more important than ever to start your retirement planning from an early age, however dull a prospect that may sound to younger generations. Putting money into a pension each month will provide you with a regular income once you retire.
There are three types of pension:
• state pension – you receive income from the state once you reach a certain age
• workplace pension – contributions from your salary, your employer and government
• personal pension – aimed to supplement other pensions or for the self-employed.
More than seven million workers have been automatically enrolled into workplace pensions since the policy was introduced in 2012, with the igure set to pass ten million next year. The days of relying on a state pension to cover the costs of your retirement are long gone. Consumer watchdog Which? calculates the average person currently needs an annual income of £26,000 to fund a comfortable retirement, which is why the earlier you start saving the more financially stable you will be later in life.
For more tips on planning your retirement in your 20s, 30s, 40s, 50s and 60s – click here to read our full article.