Protecting your future

Pensions

A pension is a long-term investment designed to help you build up money for your retirement in a tax-efficient way.

The amount of money you eventually end up with in retirement depends on a number of factors, like the value of your plan when you decide to take out your money. If you are enrolled into a defined contribution pension scheme this value isn’t guaranteed – your pension pot can go down as well as up.

However close or far away retirement is, it's a good idea to check what your employer's pension contribution policy is. That way, you can make sure you're getting the most possible from your workplace pension scheme. Find out more about workplace pension schemes.

If you’re not eligible for your company pension scheme, you can ask your employer to opt you into the scheme. Alternatively, you can set up a private pension, this may be most suitable for the self-employed.

You start receiving the State Pension from the government when you reach a certain age. It's designed to support you through later life. To be able to claim the maximum amount of state pension (which changes from year to year), you need to have made 35 qualifying years of National Insurance Contributions.

Lifetime mortgages

A lifetime mortgage allows you to take out tax-free cash as a loan secured against your home. This is a type of lending called equity release. You can choose to take your cash either as a lump sum or in regular payments. Homeowners choose to release equity for a wide range of reasons, such as to help with their retirement plans, pay off an existing mortgage, make home improvements or to raise some cash to give as a gift to family or friends.

You remain the owner of your home and the loan needs to be repaid upon the death of either you or the last applicant on the lifetime mortgage, or when you or the last applicant moves into long-term residential care.

Life and critical illness products

Financial protection products, such as life and critical illness cover, can offer a financial safety net in the event of a debilitating illness or death. People often discuss life insurance policies when taking out a mortgage, as it provides a safety net to help you, or your family keep up with repayments if you being terminally ill or your death results in a loss of income. Critical Illness can be used to support with bill payments after a loss of income through being unable to work due to illness.

You may already have some form of cover from your employer – it’s worth checking with them. However, policies provided through an employer may not be written with your exact needs in mind so it is worth reviewing if more cover is required. Speaking to a financial adviser to gain a better picture of the level of cover you may need could be a useful first step. You'll normally be charged for any advice you receive.

The amount you pay for a life or critical illness policy varies depending on the information you provide when you apply. Age, history of illness and your general health are likely to impact how much you pay for your policy.

There are also different types of life insurance policies. Some are linked to investments, for example. Some life insurance or critical illness policies include additional practical and emotional support through difficult times.