You have different options to consider when preparing yourself for retirement, and giving you and your loved ones a secure 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.
If you're over the age of 22 and you earn above £10,000 a year, your employer will have automatically enrolled you into their workplace pension scheme. This means you pay a minimum of 5% of your income into your pension. Your employer also contributes a minimum of 3% of your earnings, so a total of 8% would have been paid in every month.
Automatic enrolment started with large employers in 2012 and was then rolled out to all companies in 2018, if you are unsure of your pension savings from before these dates head to the government's pension tracing service.
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. Watch our video to find out what the difference is between the state pension and a private pension.