None of us want to get older. But we have to be realistic, very soon our generation will be grey, wrinkly and bemoaning the weather every waking hour. We’re not meaning to depress you but it is something that we all know is going to happen to us – so let’s accept it and get on with it. One of the major things we have to prepare for that goes hand in hand with old age though is pensions. Once we stop working, we need to have a regular income and make sure that life can continue to go on after work.
So what’s the benefits of pensions and are they really worth it? What are the options for old age living? The majority of people you speak to say that saving for retirement whilst working in your twenties, thirties and forties is the best way. Put something away each month and save from there and you will be set. That’s what most people say. Others, however, are of a mindset that pensions are a rip off and a lot of people will spend years putting money into a pension pot only for that pot to collapse for one reason or another. Talk to these people who believe this and they will tell you that pensions are a false economy. If you are of sceptical mind, too, maybe you should look into a couple more options.
One of the most popular alternatives is to save into an ISA. It too is a tax free facility and is a good way to make sure your money is safe – probably safer than in a pensions pot.
A lot of people, quite rightly so, are also using property as leverage for pension financing.
A lot of people are using their homes (which they paid very little for 50 years ago) , watching them rise in value and then either selling them and moving into something much smaller in retirement and using the cash that is then freed up; or doing an equity release scheme. It must be said that whilst house prices are at a premium these days, it will be more difficult in this day and age to do this as house prices are already at sky high prices. You also have to be very property savvy and be able to sniff out what will rise in value and what could potentially end up costing you money.
If, however, you are still of the mindset that you should stick to the tried and tested method of saving for a pension for your retirement, make sure you know everything there is to know. You only get one shot to do it correctly so take time to research and learn all there is to know about tips etc.
You should firstly use your workplace pension to help boost your overall pension pot. It is the law that if you are paying into a pension, your employer will match some of your contribution. Your employer could make this a lucrative deal for you, so this definitely needs looking into.
State pensions really aren’t enough to live off so you need to make sure you get something in place.