Why Save Into a Pension?

There is lots of talk in the press about pensions, good and bad, but what are the simple reasons for using one? Why is it a good idea?

  1. Employer contributions: if you are over 21, employed and earning over £10,000pa then your employer must pay into a pension for you. This means you can double your money before it is even invested, and no other investment does that for you.
  2. Tax relief: money you save into a pension does not face any income tax so every pound you commit to it costs you 80p. It also reduces your income when HMRC test for the child benefit charge and loss of personal allowance.
  3. Real growth in your money: Pensions invest in stocks and shares, which have 250 years of wealth creating history. These assets give better annual average returns than bank accounts or property investment, and all the returns are tax free.
  4. Compound interest: Einstein said compound interest was the 8th wonder of the world, and if you keep paying into your pension you will see the effect it has. Your pension pot grows slowly at first in your 20s and 30s, but it gains pace and accelerates in your forties and fifties and then you will see the genius at work.
  5. Flexible retirement: the state pension is paying out later and later, but personal pensions hold the key to retiring early. You can release extra income in the early years, to substitute for your state pension, and then reduce it later when you need less.
  6. Inheritance: you can leave your pension pot to your children. Particularly if you’re a single parent or divorced, your pension can be an extra way to leave the most to those you love.

We help people retire: we help them retire early, we help them retire wealthy, we help them retire young, we help them retire healthy with our Retirement Planning services. Call Greg today on 07747 055518 or 0203 8937540 for free initial telephone advice.


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We have been operating in the financial sector for ?? years and our friendly, caring and experienced team provide valuable financial advice on a range of financial matters, from Investments and Pensions to Mortgage and Healthcare plus everything in between.


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