You’ll likely get your State Pension when you’re 67 or 68. And if you haven’t got a full 35 years’ worth of National Insurance contribution it will be less than the full £155.65 a week.
Fortunately, if you are aged above 22 and earn at least £10,000, new government initiatives mean employees will automatically be enrolled onto a workplace pension by 2018, which will include contributions from you, your employer and the Government by 2019. This is kinda enforced saving but the extra top ups make it good news. This means a 40-year-old earning an average wage of £30,000 a year today can expect to have saved – with all sort so assumptions which we detail on our website - the equivalent of around £150 a week for their retirement to add to the State Pension pot.
If you can get your head around a private pension too, it can be a great way to top up that pension pot. Private pensions can be set up from as little as £1 a day and stocks and shares ISAs can be arranged in 10 minutes, with a monthly direct debit of just £25 – far less than most people expect. If you’re a basic rate taxpayer, for every £80 you chuck in, the Government will add another £20 on top. That’s basically free money!
The other thing to remember is that loads of companies now make what I think of as investment ‘ready meals’. You do a simple online quiz and out pops a ready-made investment portfolio which removes the need to be a maths geek. I like Bestinvest, Fidelity and Hargreaves Lansdown for these DIY online pensions.
If pensions feel too far away then consider a stocks and shares ISA too – but only if your time horizon for that stash is 5 years or more. Charles Stanley have a cheap online ISA, as well as the above names. Do have a look online for some more tips and ideas – why should boys have all the funds?!