Why Workplace Pensions?Posted on: 02 March 2015 by James Hester
It’s never too late to start saving into a pension scheme, especially as you could be turning down extra money from your employer as well as tax relief.
Changes in the law with the introduction of what’s known as “Automatic Enrolment” mean that every employer must automatically enrol workers into a Workplace Pension scheme if they are aged between 22 and state pension age, earn more than £10,000 a year and work in the UK.
You should never think of it as being too late to join a pension scheme, especially as you could be turning down extra money from your employer as well as tax relief. And its hassle free for you as your boss takes care of all the admin.
The best deal going
Pensions are by a long way the best savings deal around as the tax relief is second to none. Over time, the money you build up as tax relief on your pension contributions could be quite significant.
For every £10 you pay into your pension, HM Revenue & Customs (HMRC) will add £2 in basic rate tax relief. This means that everytime you pay extra into your pension saving the Government will contribute tax relief too helping you to build your savings faster.
As well as receiving the up-front tax relief from HMRC, while your funds are in the pension scheme they are not subject to income or capital gains tax.
New rules should make your pension saving increasingly advantageous for both you and your family. Changes to Workplace Pensions as part of Automatic Enrolment mean that at minimum contribution rates a workers contribution is effectively doubled by the employer contributions and the tax relief helping you to build a decent pension pot over time.
What’s more, new rules that allow you to take your pension as a series of tax free, lump sum payments should also make pensions even more advantageous.
It’s never too early or too late to join a Workplace Pension. Saving more now gives you a better chance of being able to enjoy your retirement to the full.
For more information visit DWP Workplace Pensions
Return to 'We're All In' Workplace Pensions hub
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