Simple pension planning
These days, planning for your future financially has become a tricky business. With the economy swerving wildly between the brink of recession and a slow but sure return to normality thanks to some new governmental intervention, it’s hard to know whether you’re coming or going, let alone where to put your faith and hard-earned cash.
While many banks have felt the devastating blow of a sudden run of customers withdrawing their money in favour of the space under their mattress, most financial advisors still see benefit to be found in investment and long-term savings – regardless of the media panic.
Whatever your personal interpretation of the current financial climate, the issue of where to put your money and how to safeguard your future has become the major priority of this crisis, and must be considered particularly carefully. Perhaps of most prime concern is, as ever, how to sustain yourself after retirement, with the same discussions prevalent around inadequate state pensions and how to counter it.
Regardless of your age or the stage of your career, it pays to start considering what will happen to your earnings when the time comes to pack it all in – particularly in the event of a downturn in government policy. Stakeholder pensions is still the most simple and perhaps most viable option – it’s also the scheme that’ll probably make the least difference to your current income, but yield a decent result in the long haul.
Where a lot of existing pension plans aimed at individuals can have pretty high charges (on average something like 2.5% of the fund) the government itself has stepped in to legislate over the stakeholder pension, and capped the amount that the pension provider can charge at 1%.
This means that, although on paper the scheme might seem less yielding than others, you are at least assured of certain conditions alongside that of the percentage charge from your pension provider, such as being able to transfer the pension with you if you move jobs in the future, and there are no surrender penalties. It’s personal aspect is also a bonus, with those on irregular incomes or even those on leave or sabbatical, able to maintain a stakeholder plan.
As a good place to start, Legal & General pensions offer a very reasonable and trustworthy plan, and will enable an initial understanding of how one might customise the idea to fit your particular circumstances. Whatever your circumstances – and we’re all in pretty unsure ones at the moment – it will pay dividends to prepare for that time of your life when, above everything else, we all want some comfort and reward.