According to National Employment Savings Trust, only 24% of self-employed people are saving into a pension, which leaves a lot of people who are unprepared for retirement.
We all understand why it is important to save for retirement – not least the UK government, who have made it a legal requirement for every UK employer to enrol their staff into the Workplace Pension scheme. It is, however, left up to the self-employed to decide whether they save into a pension.
As a former freelance director-of-photography, my day-to-day focus was on my current job, and I concentrated on engaging clients about future work and managing my accounts, and other admin tasks, in my spare time. Throughout my 20s and 30s, retiring was the last thing on my mind, so it comes as no surprise to learn that the majority of self-employed people are not saving into a pension.
This is why, at YellowWork, we’ve made it easy for you to find the perfect Personal Pension, enabling you to make affordable regular or ad hoc payments to provide financial security and freedom for when you retire. Connect with a specialist financial advisor today to discover the most suitable pensions for you.
Without a Personal Pension, the maximum State Pension that you would currently receive is only £179.60 per week (2021/2022), and the State Pension age is rising.
You’ll have the option to pay however much you like. Your pension provider can also claim tax relief and can add it to your pension pot. Here are some more benefits that you will receive:
- You get a 25% tax top-up from the government (if you pay in £100, the government effectively adds £25 to your pension)
- Good pension plans give you low-cost access to professional investment managers, who invest your money in a range of assets. This is considered to be a sensible way of managing risk
- If you die before 75, your pension can usually be passed on to your beneficiaries as a lump sum without inheritance tax deductions
- New pension rules provide more choice in what you do with your pension savings when you reach retirement, including taking up to 25% as a lump sum without paying tax
These are all reasons why pensions are great for long-term saving. You should also be aware that you could be charged tax if you pay above £40,000 per year. See the Annual Allowance and Lifetime Allowance on the .GOV website or speak to an expert financial advisor for more details.
If you would like to speak with a specialist financial advisor to discover the best saving options for you, connect with us today.