How to maximise your pension

There are three main sources of income in retirement; the state pension, a workplace pension and a private pension. 

Your income from a state pension will depend on the number of National Insurance (NI) contributions (or credits) you clock up in your career. Under the new single tier state pension system, you need a minimum of 10 years of NI contributions to qualify for any state pension benefit and 35 years of credits to qualify for a full basic state pension.  The full state pension at present is £159.55 a week.

Most employees will now have a workplace pension that benefits from employer contributions.  It is advisable to be a member of such a scheme as it allows you to make your own contribution and also benefit from your employer’s contribution.

Apart from the above, it is possible to save into an individual personal pension. Deciding how much money to put into this pension will depend on the kind of lifestyle you want to enjoy, your age now, when you started saving and how much you earn.

When taking out a pension you should make sure enquire as to the charges levied by providers as these can have a big impact on your final retirement pot. 

John BaxterComment