Just a third of people accept that they will have to work beyond 65, even though the state pension age is set to rise.
British workers remain overly optimistic about the age at which they will be able to retire, with just a third conceding they will work beyond 65, a survey shows.
Pensions are long-term investments designed to help ensure that you have enough income in retirement. The government encourages you to save towards your retirement by offering ‘tax relief’ on your contributions.
The introduction of Pension Simplification legislation on 6 April 2006 (A-Day) brought about the biggest change in pension legislation in a lifetime with the following aims:
Important changes on the horizon
The additional State Pension, or State Second Pension, is paid in addition to the basic State Pension. Your entitlement to the additional State Pension (whether from SERPS – State Earnings-Related Pension Scheme, or from the State Second Pension) is calculated when you claim the basic State Pension.
The state pension age is the earliest age at which you are able to claim your state pension benefits. For many years this has been 65 for men and 60 for women, but things are soon to change. And the age at which you can claim that state pension will be determined by when you were born. However, this could all change again under a new government following the forthcoming general election.
Around 55* per cent of people said they were either currently not saving enough or they had to face up to the reality of not having saved enough into a pension in the past, according to insurer Friends Provident.
When you decide to take benefits from your pension savings, you are not obliged to purchase an annuity and take your retirement income from the company that you hold your pension fund with.
Have you considered your options?
Buying an annuity is typically a one-off purchase, so it’s essential to obtain professional advice to ensure that you can achieve a wealthier retirement.
Maximising an income from your pension fund
The earliest you are currently permitted to take your retirement benefits is from the age of 50, but this is set to rise to age 55 from April 2010. If you are considering setting up a conventional lifetime annuity, which pays a secure income for life, there is now no requirement to buy an annuity by the age of 75. However, you must start to take your benefits from the age of 75, in addition to any tax-free element.
Additional State Pension
The earnings-related part of the State Pension built up in the State Second Pension and/or the State Earnings Related Pension Scheme (SERPS).