Why Invest Into A Pension?
A personal pension could be an effective way to ensure a happy retirement, and our own Savings Gap research has demonstrated the importance that this type of investment could have for you.
Indeed, we surveyed over 22,000 people, with the results showing that only a minority of savers will have enough funds for a comfortable retirement, by their own definition.
Our research indicated that a retirement income of £23,000 per a year is needed to live comfortably. However, based on actual savings behaviour, people in the UK are on course to receive an average income of just £6,000 per year from their retirement fund.
If you want to address this Savings Gap, a personal pension could be a smart choice. It is a tax-efficient savings scheme which builds a retirement income, meaning you won’t pay tax on any income or capital gains from your investments. You also get tax relief on any personal contributions you make, meaning the government adds payments to any amounts you put in.
You can usually invest up to 100% of your income, or £40,000 in this tax year, whichever is lower. You can transfer in from your current pensions.
Upon reaching retirement age with a private pension, you can withdraw your entire pension in a lump sum, or take an income over time.
When it comes to long term investing, with the goal of a comfortable retirement, saving into a pension could be the ideal way to prepare for the future.