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If you have no pension..

It is thought that around 12 million people across the UK have made little or no provisions for their pension - and figures from Prudential have shown that in the region of 216,000 employees across the UK currently have no pension scheme at all.
Although awareness surrounding pension schemes has increased in line with the economic downturn, too many people are still ignoring the need for a pension scheme until they near retirement – and this could be particularly damaging to their financial health upon retirement.
It is recommended you start a pension in your early 20s, and in doing this you should be able to build up a sustainable income for when you retire. Even putting off starting a pension by 10 years can mean that the amount you would receive can decrease by approximately 50%, depending on the investment growth your fund receives.

If you are thinking of taking out a pension now there are a few points to remember;

1. If you have no pension plans, then the best place to start is to find out how much State Pension you are likely to receive. The State Pension is based on National Insurance contributions you've made throughout your working life. If you have worked for a limited period, however, then your State Pension is likely to be low or non-existent. It is possible to make voluntary National Insurance contributions to help boost your 'qualifying years'.

2. Once you have found out about your entitlement for the State Pension, you can then consider whether to take out any more pension plans. You are allowed to have as many plans as you like, so this could be a good way of boosting your expected State Pension. Having an additional pension plan means that its fund will grow almost tax-free until you claim the benefits. This will help to boost the value of your pension fund too.

3. Your employer may have a Company Pension Scheme in place, which could be used to top up your retirement funds. These types of plans take your contributions straight off your salary, but a lot of employers who run these schemes will also make a contribution to your pension too.

4. If you have put off getting a pension due to financial issues, then it may be worth looking again, as many plans available now are charged on a Stakeholder basis which means there are no penalties for stopping and restarting your plans as finances dictate. So, you won't have to worry about any additional charges for doing so.

Life's longer these days..

With life expectancy higher than it was years ago, and continuing to rise, the trend for having provisions in place should be on the rise too. It is worth speaking to a financial adviser who can advise you on the different pension options available to see which one is most suitable for you. Remember, having a luxurious or comfortable lifestyle costs money and the only person who can provide competently for you in your retirement years is yourself.

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