Pensions are a hot topic at the moment, with multiple adverts on television encouraging you to join and pay into one. What’s not so clear is why should join one. Here are a few reasons to get you started:

Quality of Life

When you retire, you want to be able to enjoy life. By having a pension, you won’t be solely reliant on the state provision, which at £115 per week is just enough to cover the basics. A pension can significantly top up your income, meaning you not only have the time to do the things you want to do in your retirement, but also the money.

Having a pension pot could enable you to retire earlier than the state pension age, which is rising steadily at the moment. This means that you can have a longer retirement, allowing you to do more of the things you love.

Tax Relief

Paying into a pension isn’t as expensive as people think. The main reason for this is that it gets taken off your salary, meaning the amount of tax you have to pay is lower. Therefore, rather than the government getting that cut of your salary, you do instead! The good news is that this is available to everyone, even those earning below the tax threshold; in this case, the government will top your pension up for you by the equivalent amount!

Employers Contributions

As well as saving money on tax, another great feature of having a pension is that your employer pays in as well. This can range from simply matching your contributions through to paying a significant amount on top. This is free money for you, and money that would otherwise simply be adding to the bottom line of the company; not joining would be like saying no to a pay rise!

Lump Sum

Most pension schemes allow members to take up to a quarter of the total as a lump sum upon retirement. You can use this to decorate the house, go on holiday, or for whatever purpose you see fit.

Death Benefit

Whilst a bit morbid, most company pension schemes have a death in service benefit scheme. This means that should you die, an amount will be paid to your family and/or a nominated person(s). It’s nice knowing that simply through joining a pension scheme, there is protection in place for your nearest and dearest should the worst happen.

We’re all going to have to stop working one day, and having worked for a large percentage of our lives, retirement is a time to enjoy ourselves. Having a pension not only saves you money that otherwise would go to the government but also provides you with the cash required to enjoy your retired life.

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