Planning for your future retirement is a vital task that needs to be done right now. Getting superannuation UK and setting up a pension plan is a necessity for a comfortable retirement, as you might not be familiar with the different financial products that could provide this security here’s some basic information you need to know about this type of pension account.
Make sure you don’t miss our detailed guide on how to find the best pension plan for you. Be informed about all the options that are available for you.
What Is Superannuation UK?
Superannuation UK1 refers to the money you are saving for your retirement. It is an obligatory task people have to deal with as soon as they start working. Employers and employees both make contributions: the former, a minimum 9% of the salary (before tax) and the latter, a voluntary amount depending on how much you want to put into it.
Why Is Superannuation UK Important?
Some people do not like the fact that a percentage of their salary is being held back from them, but that minimum 9% is a guarantee you can always count on once you stopped working. Your other financial savings plan2 (state pension, personal pension, etc.) might not be enough to provide comfort and security during your retirement years. You will benefit from the compound interest on your superannuation UK, and this is something that can prove to be your most substantial asset once you decide to retire.
When Can I Have Access?
- Upon permanent retirement from any form of employment (between 55 to 60 years old)
- Upon reaching the age of 65, whether still working or not
- If you are permanently incapacitated
- If you become terminally ill
Do I Need To Consolidate My Accounts?
Most people at work these days have more than one savings plan or pension scheme (personal or occupational) but you have to remember that each entails a different set of bank charges and annual fees. We strongly advice you to speak to a reputable Pension Adviser.3
So it makes sense to put all your funds into one, this way you do not have to pay the individual fees and charges for various schemes.
Bring It Together Means
- You have to pay one all-inclusive fee
- There’s less hassle in terms of keeping tabs of statements, reports, and annual requirements
- You can monitor your funds more closely and have a better investment strategy4 that would guarantee a maximum growth potential of your savings
You can read the whole bill and understand more about how it works. If you want to find all the information you need about pension rates, make sure to check our detailed article!
Do I Need It If I Am Self-Employed?
Yes, the downside is that there’s no one to make sure that there’s a minimum 9% going to your account, but you can still contribute because it’s essential for your retirement. The advantage to this is you are eligible for a tax deduction5 every time you save until you reach the age of 75 as long as it does not go beyond the annual investment cap of £15,500.
If you find this article useful, make sure to check our our guides, they are free to download.
Got a Question About UK Pensions Superannuation?
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