You might think pensions are boring – well, think again! The changes coming on 6th April 2015 mean they’re going to be much more flexible. Julie Hutchison at Standard Life shares why pensions are worth a fresh look and how they could become a handy savings-pot
- Between now and 2018, many employees who don’t already have a company pension plan will be getting one through their workplace. Employers pay into these plans, giving your savings an extra boost. Use our new workplace calculator to work out how much you and your employer will put into your pension pot.
- Even if you aren’t working, you can still save up to £2,880 a year in your pension and benefit from tax relief that could top it up to £3,600.
- Your pension is tax efficient. This means you are not paying extra income tax or capital gains tax on it when it grows.
- You have choices about how to save into your pension. You can usually start, stop and change what you pay in.
- Your pension savings have a better chance to grow, compared to cash in the bank. Low interest-rates can mean money in your bank may actually be losing value, as inflation eats away at it. Your pension savings can vary in value, as they’re invested in the stock market. But you can choose a lower-risk fund if you prefer to take a cautious approach. Remember, a pension is an investment. Its value can go up or down and it may be worth less than you paid in.
- From 6th April 2015, you can normally take money out of your pension from age 55, and 25% can be taken as a tax-free lump sum, but remember it’s got to last you a lifetime.
- State pension statements are now available to the over 55s. Find out more here. Plus 5 financial tips if you're getting divorced.