Put more into your pensions, says ex-minister

Steve Webb, former pensions minister, has advised people to increase their contributions to their workplace pension scheme.

He said that as people get older, many want to work fewer hours. The problem with this is that they may need to work to an older age if they want an adequate pension income. Many employees mistakenly believe that because they are auto enrolled in a workplace pensions scheme, they will be financially secure when they retire.

The government has fixed minimum contributions to workplace pensions schemes at 8% of a worker’s salary, paid for by the employer and the employee. According to Steve Webb, this contribution level may not be enough and he advises increasing it.
Webb said:

“The good news is that there is an antidote to excessive working lives and this is higher rates of pension contributions. We find that each one per cent on pension contribution rates takes at least one year off the number of years for which you have to work to achieve a decent retirement.”

The government is to review pensions this year, and Webb wants them to consider raising the contribution levels.

His advice highlights the need for retirement planning, and in the Wirral, which has a higher than average elderly population, residents need to look at how much they will have to live on when they retire. As well as increasing workplace pension contributions, there are other investment strategies that will provide a retirement income.

Here at Endeavour, we can help you in your financial planning, ensuring a comfortable and enjoyable retirement.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interests rates and tax legislation