Retirement is a big subject, especially the subject of funding that retirement. In the last fifty plus years things have changed and plans that once worked for retirement have had to be refigured.
The best time to start saving for retirement is when you are young, as the more years you pay into your retirement fund, the more substantial a fund it will be. And, consequently, the better a retirement and bigger annuity supermarket you will be able to enjoy. Most Britons are eligible for the basic State Pension, but are likely to need more for a comfortable retirement.
There are various ways to go about this. A good first step is to speak with a financial advisor who can help you to crunch your numbers and determine how much of your income you are able to stash away, and what method of “stashing” you should use. Bear in mind that a retirement fund is a long term investment; you will not be able to touch those funds until you are at least 55 years old. This means that “once in, long time in,” so you have to be sure you know how much money you can afford to invest into your retirement annuity fund, without hurting yourself in the present.
A good place to check out when you begin contemplating your retirement fund is the pension scheme your employer offers. At this point, it is not required of UK companies with less than 5 employees to offer a retirement scheme, but some do anyways. It is projected that the laws will change to require all employers to offer retirement benefits to their employees. Some employers pay into your retirement plan, others match your contribution, and some do not contribute, but only offer the investment plan for their employees to pay into.
Some, either for being self employed, or for some other reason, look into other forms of saving for retirement. This can be personal investments, or stocks and bonds that are likely to mature over time. Others are counting on property, or insurance policies funding their pension. Each of these options are viable, if done correctly. If you are interested in a more alternative saving plan, speak with an advisor to get the best idea of what the options are.
Remember that your contributions to your pension fund come with tax relief. This can get you a nice break and make it easier to save for a comfortable retirement.
Presently, the age when you can claim your State Pension is 65 years for men and 60-65 for women. Depending on the year you were born in. Retirement annuity age is scheduled to go up to 65 for all women between April 2012-November 2018. It is expected that the State Pension claiming age for both men and women will continue to inch up, based on life expectancy, and other factors.