To receive State Pension (Basic: £141.85 / New: £185.15 per week) individuals must have paid or been credited National Insurance Contributions. For more information, please visit the links below.
Thinking of your retirement fund?
Thinking of ways to maximise your contributions?
Want to be financially secure when you reach retirement?
Here are our top tips to help maximise your contributions:
1. Workplace pensions - all employers are required to provide a workplace pension. To be auto enrolled (opted into the pension scheme) you must earn at least £10,000 and be aged between 22 and State Pension age. If you have not yet been auto enrolled, you can voluntarily opt in to start saving early.
Contribution rates: Employer 3% You pay 5%
The above rate that you as an individual contribute can be increased at any time – we recommend this. Another benefit to increasing your contributions is that it reduces the amount of Income Tax and National Insurance you pay too. The government will also add money to your workplace pension in the for of tax relief (rules apply, please visit the link below for more information).
2. Spare income – got some extra cash lying around each month? Why not put it away into your pension fund. Small contributions can really add up over time and benefit you in the long run.
3. ISA or Pension? – This all depends on when you want access to your money. With a private pension your money is locked away until you reach the age of 55 whereas ISA’s you can freely access this money. BOTH pension and ISAs are free from Capital Gains Tax. You can save up to £20,000 into an ISA for the current tax year 2022/23 and up to £40,000 in pension contributions (anything over this is liable to tax).
Benefits
Pension
-Tax relief on personal payments
-The amount you save grows tax free
-25% of your total pension fund can be taken tax free
ISA
-No income tax is payable when you access your savings
-Access whenever you need
-The amount you save grows tax free
-No tax paid on dividends
4. Check your National Insurance record – If there are any gaps in your national insurance record then now is the time to log into your HMRC personal tax account and top-up the payments.
5. Self Employed – If your income is below £6,725 (tax year 2022/23) you are not required to pay Class 2 National Insurance. In the long run this may cause gaps in your National Insurance record. To receive State Pension, you’ll usually need to have 10 qualifying years on your NI record. We recommend paying your Class 2 voluntarily to benefit you in the future.
We know that no one wants to have to pay more than they must, but increasing your contributions even just a little will help you in the long run.
For more information please visit:
Basic State Pension: https://www.gov.uk/state-pension
The New State Pension: https://www.gov.uk/new-state-pension
Workplace Pensions: https://www.gov.uk/workplace-pensions
Voluntary National Insurance: https://www.gov.uk/voluntary-national-insurance-contributions
Comments