Pensions planning when you're starting out
If you haven’t yet started planning for your retirement then this information will help. The state will provide some support but you will still need to plan for your future. Find out what the state provides, how to start a personal and company pension or invest for your retirement.
Why you need to plan
Saving for your retirement may not seem important when you’re starting out but the sooner you start saving for your retirement the more secure your future will be. The state will help but you will need to make your own plans to make sure you are comfortable when you retire in the future.
Having a personal or company pension
The sooner you start putting money into your own personal or company pension, the more time you have for it to build up. You might choose to take out your own personal or company pension because:
- you may get money back in tax relief
- you may get additional contributions from your employer
- you can lock your money away until you retire
See ‘Pensions – an overview’ to find out more about the different types of pensions that are available, for instance, personal, stakeholder and company pensions.
What the state provides
The basic State Pension will provide you with a start. If you are entitled to a basic State Pension then the earliest you can get it is when you reach your State Pension age. See ‘Calculating your State Pension age’ to find out when you will reach it.
Qualifying for a basic State Pension
The amount of State Pension you get depends on how many qualifying years of national insurance you have built up. See ‘Qualifying for a basic State Pension’ to find out how this works.
Additional State Pension
An additional State Pension is also provided by the government. Find out how this works and who can get additional State Pension.
Getting an estimate of your State Pension
To get an estimate of how much State Pension you may get in the future, see ‘Getting a State Pension statement’.
Starting a personal or company pension
You can get a company pension through your job or you can set up a personal one on your own. You could even do both. From 2012 there will be a new way of saving at work. In the new system your employer will automatically enrol you into a pension unless you are already in a suitable scheme. Enrolment will be easy and you will be able to opt out if you want.
Help and advice on personal and company pensions
If you're thinking about taking out a pension it can be a good idea to get help from a specialist before you buy. See ‘Choosing a pensions adviser’ to find out about pensions advisers and who else can help you.
Savings and investment
As well as pensions, there are many other ways to build up money for the long term. These include savings accounts, ISAs, property and a range of other types of investments.
Each type of savings and investment works differently and has its own pros and cons.
Find out about the different types of savings in ‘Main ways to save or invest your money’.