State Pension payments offer financial support to eligible individuals who have reached a certain age, and have built up a set number of National Insurance contributions. The Government states, however, it is important to note individuals may get less than the full state pension if they were contracted out before April 6, 2016. While many retired people rely upon the state pension for support in later life, the sum from the Department for Work and Pensions (DWP) may not be enough for the goals Britons have in mind.
“Due to the fact we are an ageing population, there are going to be a lot more people at retirement age, and in retirement, than there are that are working. You can really only see this going one way.”
The full state pension currently offers £175.20 per week but how much someone will receive is usually dependent on their National Insurance contributions.
Individuals will usually need at least 10 qualifying years on their record to get any state pension sum at all.
Ms Julian continued: “The state pension won’t be enough for you. Luckily, there is auto-enrolment, but again, I don’t think people should believe that is even going to be enough.
“Personally, I think the constant tinkering every year with pensions doesn’t exactly add to the attraction to saving for retirement.
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“But you should still be looking at private arrangements, and what you can put into place to save for your own retirement.”
Taking an active role with pension saving is also a matter which is considered to be important.
Having an understanding of one’s savings and retirement goals is likely to help keep individuals on track for their eventual retirement, an issue which Ms Julian touched upon further.
She said: “Do contribute to your pension as far as you are able to, as pensions are very tax-efficient.
“You can get 25 percent tax relief on the way out, or possibly more – which is a substantial benefit.
“In addition, the way you can draw down on a pension flexibly now is good, and you can also get an income where you’re not paying more tax than you need to.
“If people can understand even if you are just putting a nominal amount away regularly over 30 or 40 years this can be beneficial.
“By doing this, you’re definitely going to be doing a bit better than leaving it until the last minute and panicking that you need to put chunkier amounts in.”
However, while pension saving can be important for millions of people, it is understanding this importance which has been stressed as key.
Opening up the understanding of not only the state pension, but also workplace pensions and private arrangements, Ms Julian emphasised, is vital going forward.
She concluded: “There really needs to be more education about the implications and financial burdens of retirement.
“We also need to rise the potential lack of full support from the state pension for people in retirement.
“The younger you are, perhaps you feel as if pension saving isn’t that interesting or relevant to your life.
“However, it is, because ultimately, we’re all going to get there. The more we can educate people about this, the better.”
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