Download Pensions

• To understand that pensions are a
way of saving for retirement
• To appreciate that making longer
term financial plans are a way of
achieving financial security in later
life
When I’m older…
It seems a long way off, particularly when you’ve
not even started your working career … but have
you ever thought what you would like to do after
you have stopped working?
 What might your life look like?
 What do you see yourself doing?
 What sort of lifestyle would you like to have?
When I’ve retired…
When your working life is over …. you will have
retired however…you will still need to pay the bills
and …there will still be things that you want to do
So how do older people afford to live if they
aren’t working?
Introducing pensions
A pension is a form of saving for when you are
older and no longer working. The types of
pensions available are:
1. State pension
We should all get this as long as we’ve worked for a certain number of years
2. Workplace pension
If we are in work then our employers will provide a scheme for us to pay into
3. Individual pension scheme
– Personal pension
– Stakeholder pension
If we want to we can set up our own pension too in addition to a work place
scheme
What to remember now …
 Pension = A form of long term saving
 There is a state pension but it will really only help to cover the
essentials
Currently £119.30 per week (2016)
 You’ll be automatically enrolled into a workplace pension
scheme once you start working
Your employer will contribute to it as well as you
 You can set up your own additional pension fund and pay in
regularly out of your income
This is a good way to boost what you will receive when retired
 You will earn interest on the savings
 Tax breaks on pensions mean you get “extra money”
If you pay in £40 each month the government will give you an extra
£10 – so you’ll have paid in £50 in total
 The earlier you start saving the more you will eventually receive
when you come to retire
Pensions activity
•
•
•
•
•
•
•
•
save
income
tax
National Insurance
benefit
thirty
employers
contribution
• annuity
• automatic
enrolment
• fund
• stocks and shares
• investments
• standards
• lump sums
What to remember then…
• When you get to retirement age you will have built
up a pot of money
• A state pension is only paid once you reach state
retirement age Currently 66 but moving to 67
• Many work-based pensions will only start paying
once you reach state retirement age
• You cannot get the money you have put into your
own individual pension pot until you are at least 55
• You can use the pot to get a regular sum at regular
intervals for the rest of your life (after retiring) OR
• Cash in some of the pot as a lump sum and use the
remainder for a regular payment
Golden rules
Imagine you now have to tell a friend about
pensions…
 Write five ‘golden rules’ for them, these
should include things to think about NOW
and into the future.
 Share some of your ideas with the rest of the
class