How can I make sure I can continue to enjoy my lifestyle after I retire?Posted on: 02 March 2015 by James Hester
You could live 20 years or more in retirement, it could well be worth increasing the contributions you make to your Workplace Pension scheme now.
At the end of the day, what you get out of your pension will depend on what you put in. And opting out of your Workplace Pension scheme means you could be turning down extra money from your employer.
Although you can claim state pension from the government, depending on how many years of National Insurance (NI) contributions you have made, this is unlikely to provide you with the same lifestyle that you enjoyed in your pre-retirement years if there is a significant shortfall in your retirement pot.
Meanwhile, it could be more beneficial than ever for you to be enrolled in your Workplace Pension scheme. Changes to the law with the introduction of what’s known as “Automatic Enrolment” mean that you could get extra money from your boss paid into your pension pot each month. It’s hassle free as your employer takes care of all the admin.
Your retirement income
Most people tend to spend a similar amount of money in retirement as they did in their last years of working.
The income you get at retirement is made up of what you receive from your state pension and what you get from your pension pot. Being short of either could hurt your retirement income considerably.
The bigger the contributions you make, and the earlier you make them, the larger your pension pot should be when you come to retirement.
At the same time, it’s never too late to join a pension scheme, especially as you could be turning down extra money from your employer as well as tax relief.
Mind the gap
Currently, the basic state pension is a maximum of just £113.10 per week. What you actually receive depends on the number of years you have worked and the corresponding national insurance contributions that you have had deducted from your salary.
The State pension covers the basics and provides a sound foundation for retirement but most people will want to save more you can continue to maintain your lifestyle in retirement, so it’s worth thinking about the total income you will receive in retirement so you can budget accordingly.
If you want to maximise your state pension or have not made sufficient NI contributions over the years to qualify, you may be able to top these up now to boost your retirement income.
As someone aged 50 today could easily work for another 20 years, and spend another 20 years in retirement, it could well be worth increasing the contributions you make to your Workplace Pension scheme now.
For more information visit DWP Workplace Pensions
Return to 'We're All In' Workplace Pensions hub
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