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Mohaimon, a 29-year-old living in London, explains his decision not to pay into a pension by stating, “I am more worried about surviving day-to-day than worrying about the future.” Originally from Bangladesh, he works in the hospitality sector and prefers to save for a house deposit rather than retirement. Despite being auto-enrolled in a pension scheme during university, he stopped contributing when he realized he couldn’t access the funds until retirement. Mohaimon’s financial decisions are focused on survival, making saving for a house a more pressing priority for him than planning for retirement.
Saira Amir, a 46-year-old self-employed stylist in Norfolk, expresses her desire to save for a pension but struggles to cover her daily expenses. With three children living at home, Saira finds it challenging to afford saving for retirement on top of her current financial responsibilities. Despite receiving universal credit to help with living costs, she finds it insufficient to set aside money for a pension. Saira also reflects on the changing dynamics within her Pakistani family, where previous generations relied on children for support in retirement, but she feels uncertain about her own children’s future financial contributions.
Individuals without a private or workplace pension may have to rely on the state pension in retirement. The full state pension, requiring 35 years of National Insurance contributions, amounts to £230.25 per week. However, the Pensions and Lifetime Savings Association estimates that for a minimum retirement living standard, individuals would need £13,400 a year for one person and £21,600 for two. Additionally, those paying into a workplace pension receive tax relief on their contributions, with basic rate taxpayers benefiting from a 20% tax relief on their pension contributions.
Victoria Olsena, a 38-year-old British citizen originally from Argentina, emphasizes the importance of saving for retirement, stating, “People should realize that the future is going to be terrible and they should do something about it.” As the owner of an AI marketing consultancy earning £50,000 a year, Victoria contributes to a pension and an ISA. She believes that starting to save for retirement early is crucial for building up savings over time. Helen at Hargreaves Lansdown underscores the value of consistent contributions to a pension, highlighting the importance of early planning for a secure retirement
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