When you retire you still need food and shelter as an absolute minimum, but of course you will want to maintain the lifestyle to which you have become accustomed, so unless you can guarantee a large inheritance or windfall, then you need to provide yourself with a secure income for the rest of your life.
A well-prepared pension plan which is regularly reviewed should go some way to providing you with a reasonable level of income in your retirement.
A pension plan requires action as soon as possible, so start now - and if you have already started, take the opportunity to have a closer look at your existing arrangements to make sure you are on track.
There is no simple answer as this depends on your employment status, e.g. self-employed, employed or director, and the benefits that are available through your employer’s scheme, if there is one.
Tax Bracket | You Pay | HMRC Pays | Payment into pension | Further tax relief claimed from HMRC | Cost to you |
---|---|---|---|---|---|
Basic | £80 | £20 | £100 | Nil | £80 |
Higher | £80 | £20 | £100 | £20 | £60 |
Additional | £80 | £20 | £100 | £25 | £55 |