State Pension

Business, Financing.

Savings accounts - retire in style - we all look forward to the day when we can give up work - but to ensure your retirement is comfortable you will need to prepare for it carefully. Not only this, but there are substantial benefits to saving into a pension - you' re not taxed on contributions and there may be additional extras such as life insurance or lump sums included in your scheme.

Putting a proportion of your earnings towards a pension may seem like a drag right now, but realistically you will need to save for as long as possible to gain a decent income in later years. - these days people are investing more and more in private pension schemes and long term savings - the state pension is likely to become negligible with an ageing national population. At present, the basic pension for a single person is �805 a week. State Pension. This depends on you having made sufficient National Insurance Contributions over your working life. Bear in mind that the age when you can claim your pension( currently 65 for men, 60 for women) is highly likely to rise in the near future, and keep on rising.

Even if you have paid off your mortgage by the time you retire, would this be enough for you to live on? - company pensions. The terms and details of these vary from company to company, but usually fall into one of two basic types: 'final salary' schemes, based on your salary and how long you' ve been paying into the pension. Employers are likely to offer some form of pension scheme. And' money purchase' schemes, which depend on the amount contributed into the fund. A money purchase scheme can be more flexible, but slightly more risky. When you retire, you then buy an annuity - a type of insurance which will pay you a regular income.

Personal Pensions. - personal pensions operate in roughly the same manner as company pensions, only you have more control over your investment. These schemes offer a lot of flexibility, and there are several different ways to invest, including investment trusts and unit - linked schemes that depend on share prices. Currently there are limits on the contributions you can make to personal pensions, but these are set to change in 200 The rules on pensions are changing all the time, and are likely to undergo radical changes in the next few years. For up to date advice, check the Pensions Advisory Service at www. pensionsadvisoryservice. org. uk