Retirement planning
Planning for your retirement and choosing a pension can be a minefield. Bear in mind these basic facts:
1. We are all living longer. More people are living longer than ever before. If you hope to retire at 55, you could easily be alive 30 years later. You need to save enough money to see you through.
2. Consider how much to pay into your pension. A quick rule of thumb suggested by many experts is to take the age you first started your pension, halve it and save that percentage of your income until you retire. So if you started a pension at 26, so they say, you should save 13 per cent of your income. Bear in mind that your payments should increase as your income rises.
3. There's a limit on how much you can pay. If you have a personal pension, you are entitled to tax relief on contributions. But there are limits to how much money - or percentage of your income - you can pay. If you are 35 or less, you can pay in 17.5% of your income or just less than £17,000 a year. See below for further limits:
Age on 6th April:
- 35 or less: 17.5% of income
- 36-45: 20% of income
- 46-50: 25% of income
- 51-55: 30% of income
- 56-60: 35% of income
- 61 or over: 40% of income
1 | 2 | 3 | next
send to a friend
Delicious
Digg
reddit
Facebook
StumbleUpon
Horoscopes| Message Boards | Quizzes | Newsletters | Join
iVillage Ltd is a UK company registered in England & Wales (3837269) at 80-110 New Oxford Street, London WC1 1HB
