Building your savings for the future

When you get around to thinking about your finances, what sort of things spring to mind?

A mortgage or a car loan? Looking after a family? Paying the bills? Probably not pensions, though.

But the fact is that tomorrow comes around sooner than most of us think…. So where do you begin?

First, find out what you already have, and what you could have when you retire. Your annual pension statement can help here. There’s the state pension, or course…

This is the current weekly state pension for a single person. You need to have 35 years National Insurance Contributions to get this much, which is the full amount. Wouldn’t want to leave on that? Maybe not.

So, what other money could you have to live on?

Think about any money you’re saving in a bank or an ISA. Factor that in.

Next, if you have a workplace pension, check how much is being paid in each month.

The benefit from a workplace pension is that you will normally be eligible for tax relief from the government on your personal contributions.

So if you’re a basic rate tax payer, every £100 which goes into your pension will cost you £80 from your post- tax pay. Don’t forget that your employer will probably also be contributing themselves. Both tax relief and your employer’s contributions increase your pension. Next think about what you are going to need when you’ve finished working.

Think about whether you can afford to save some extra money from your salary. Putting aside just a little now could still make a big difference later.

You need to remember that your pension money is invested to try and help it growand, as with any investment, the value can go down as well as up and you may get back less than you put in. That’s why it’s important to keep a close eye on the value of your pension and other investments.

If you want to join or make changes to your workplace pension just get in touch with your employer.

So, in summary, find out what you’ve already got: plan how much you might need- and then take action.

And remember, however busy you may be right now, it’s worth taking time out to think about your future…while there’s still time to make a difference to it!

To help with retirement planning visit our website. You’ll find videos, calculators and online tools. Our Shape my future tool can help you get an idea what your future could look like, and what you can do to make changes now.