Why do you need a pension?

It's not compulsory to have a pension but it's a good idea to think about one, especially if you don't have a large lump sum or any alternative income to fall back on when you retire.

The reality is we are living longer, Office for National Statistics' trends tables show the life expectancy of our population is rapidly increasing:

One of the effects of living longer is that retirement can last for tens of years, so how do you support yourself for those years if you don't have an income from employment?

Apart from needing to pay for basic living costs such as accommodation, food and utilities, you'll potentially have a lot of time on your hands which you may want to use to travel or pursue hobbies or interests, having enough money to do these things may become very important to your overall quality of life.

When the first 'Old Age Pension' scheme was introduced in the UK in 1909, only people earning less than £21 per year qualified for it, this low threshold was set to encourage people who earned more to make their own provisions for their retirement.

The same applies today as the Basic State pension is currently around £90 per week for a single person and around £140 per week for a couple.

Taking advantage of the Government contributing via tax relief, or your employer contributing to your pension scheme on your behalf, can significantly increase how much you can accumulate, when compared to what you might be able to save and invest by yourself.

In all cases the earlier you can start contributing to some sort of pension scheme the better!

Download the UK Pension PDF Guide here - see our other free PDF guides here

Guide Contents

What is a Pension?
Why do you need a pension?
State and other types of Pension Schemes
Company or occupational pensions offered by Employers
Personal or private pension schemes
Shopping around for a personal pension scheme
Pension FAQs
Where can I go to get more help?

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