You’ve reached the age where you’ve either started being notified about opening a pension or have become very aware that you don’t have one. We’re never taught how to open a pension, only that they exist, so this short guide should help you on your way to ensuring that you have a retirement fund waiting for you once you reach 65.
You can open a pension any time. If you’re a parent, you should be aware that you can open a pension for your child no matter their age; and a lot of parents are opting to do this to make sure that their children don’t have to worry too much as they get older. Retirement years typically last between 20 and 30 years, but sometimes, if you’re healthy, you may be around after that.
You’ll need a personal pension during these years so that you don’t have to come out of retirement if you don’t want to. Some people are happy to work late into their 70s, but with the option of accessing your pension as early as 55, and retirement age set at 65, it’s completely up to you to decide when you want to dip into your retirement fund. Because of this, you’re going to need a good personal pension scheme set up.
If you want a basic solution, you should know that your workplace with try to automatically enrol you on their own work pension scheme once you reach the age of 22. They are legally required to notify you and you can opt out of your employer’s pension scheme. In the case that you do opt out, and therefore, require a different pension scheme, it’s time to start looking into alternatives.
With a personal pension, you can make regular payments into your pension fund. Personal pensions are provided by insurance companies, but you’ll often open them with banks, building societies, and other financial entities. Of course, you can also open one through your current workplace, and you’ll receive details of how to access your pension account through the mail once you do so.
When you start your search for a personal pension, you may quickly be overwhelmed with the sheer number of personal pensions that are available for you. Shop around to find the best personal pension for you. Using money comparison websites might help point you in the right direction here.
Compare various pension products within each provider as well as from different pension providers. Look for key facts about each pension service and remember that it’s perfectly okay to contact the company directly and ask about their pension services. You might understand the system better from a human talking to you, rather than reading a plethora of information.
Finally, if you are opening a pension, make sure that you can afford the payments into the pension that you need to make. Some personal pensions require a minimum contribution, so if you aren’t particularly financially stable, you might want to find a pension that doesn’t have a minimum payment attached to it.