Method of saving for your retirement that has tax benefits. Upon retiring, you won’t be paid a wage by your employer, you’ll start using the pension fund to pay for your costs. 3 main types of pension:
- Workplace Pension: Arranged by an employer. If you work in the UK, are aged between 22 and the state pension age as well as earn >£10,000 per year, you’re eligible. The employer will enrol you in the scheme and every time you are paid, a portion is put into the workplace pension alongside a contribution from your employer. These contributions you make will get basic rate tax relief, and you claim another 20-25% in additional tax relief if you’re a higher rate taxpayer, this is done through a self assessment.
- State Pension: Regular payment from the government upon retiring. To claim, the qualifying age must be met within 10 qualifying years on national insurance record. The money received will depend on your NI record, if you have 35+ years of contributions, you’ll get the full amount.
Individual Pension: Broken down into 3 types:
- SIPPs (Self-invested personal pensions)