Money Saving Expert founder Martin Lewis explained how private workplace pension schemes work and advised people to change their policies immediately for an easy return on
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A simple change means workers can “double or triple” their pension, one financial expert claims.
The founder of Money Saving Expert, Martin Lewis, urges people to consider their retirement savings now.
In one of his episodes ITV shows, he offered some key tips that can boost a pension fund in retirement.
He explains how private workplace pension schemes work and advises people to change their policies immediately to make it easier to make a profit.
For every amount set aside for later life, he says you pay less tax on the money saved into your pension and your workplace will match that.
That means if you are a base rate taxpayer and you put away £100, you will get another £60 from your employer, Lancs Live reporting.
Normally you will only keep £80 of every £100 you make as £20 will be taxed.
For higher rate taxpayers, you only keep £60 for every £100 above the higher rate threshold.
But since it’s employer-matched and not subject to income tax, you can nearly double or triple your amount by making sure you’re enrolled in a work-in-place program. work.
Martin explains: “Actually, you lose £80 on your salary package but you get double that – £160 – into your pension.
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“For a taxpayer with a higher rate, you pay £60 and you get £160, which is almost triple your pension.
“This is unbeatable – now it’s there like it, which is why my big message is, opt out and you’re effectively giving up the raise and you are also giving up tax benefits.
“Of course you’ll be taking less home but what you get out of the refund is very good, so don’t turn it down unless you absolutely have to.
“For those who aren’t automatically opt-in, many can and some of you should, because your employer must allow you to participate and they must contribute if you’re between the ages of 16 and 74 and you earn more than £6,742.
“Imagine having a 21-year-old living at home with no expenses, this is a desirable time to start receiving a pension.
“Just because you’re not opt-in just ask to join.”
Martin then explains how much of your income you should include in your pension.
He said you should take the age at which you start receiving your pension, divide it by two and then calculate that percentage for the rest of your life.
So if you start at 22, you should put 11% of your income in.
“No one has come close to that but the important thing about that equation is that it shows you to start as soon as possible. 8% doesn’t quite fit the equation but put in what you can, max. make this happen.”
https://www.mirror.co.uk/money/martin-lewis-urges-workers-double-26277655 Martin Lewis urges workers to double or triple their pension with a single change