Everyday Loans for Everyday Life

 

 

Pension inefficiency makes Brits lose millions

A new study carried out by Standard Life made the following plea to UK workers: “If people understood the tax efficiency of pensions, more would save for their retirement”.

Standard Life’s ‘Financial Efficiency’ research found that up to 77% of Brits aged 18 to 65 years old -who are not actively contributing to their future pension- actually ignore the numerous benefits of investing in a pension. This includes the fact that an extra £1 could be added for every £4 invested.
As the study makes clear, one of the top reasons for the lack of consumer inactivity over pensions is ignorance.

In fact, 35% of Brits aged 18-65 said they would happily contribute into a pension by adding an average of £159.60 each month, if that plan allowed them to earn an extra £1 for every £4 invested.

As the report explained, Brits investing in the above plan would see their monthly sum increase to £199.50 a month when basic rate tax is added. As a result, a person who starts investing in this particular pension plan from the age of 30 would enjoy a pension pot of £144,635 by the time they reach the age of 67.

“A job to be done”

“I don’t think we should be too surprised to learn that many of those people who aren’t actively investing for their retirement are still unaware of the tax benefits of a pension. Clearly there is still a job to be done, to help educate people on the benefits of tax efficient products like pensions and ISAs so they can make the most of them,” said John Lawson, Head of Pensions Policy at Standard Life.

Lawson stressed that it’s very reassuring to know that those who aren’t actively investing in a pension at present would think again if they understood just how tax efficient a pension can be.

Since UK retirees are the ones suffering from a higher inflation, counting on a reliable pension pot for your later years would give pensioners peace of mind.

Related Posts

Pockets of the over-75s hit hard by recession People aged over 75 are suffering financially as a recent report has shown the impact of recession has caused the average savings for this age group...
Minimum wage set to rise…but is it enough? The adult national minimum wage (NMW) will increase from £5.93 to £6.08 on the 1st of October. However, this 2.5% increase is not likely to make a...
What is the most expensive part of a wedding? Regardless of how good your budgeting skills are, weddings are expensive at the best of times. From hiring a venue to organising the caterers, there...
Forgotten painting fetches almost £600,000 at auct... A schoolteacher made an astonishing discovery after initiating an overdue clear-out at her Hampshire home. As she cleared out her home in Basi...
Andrew Wayland on GoogleAndrew Wayland on LinkedinAndrew Wayland on TwitterAndrew Wayland on Youtube
Andrew Wayland
Marketing Director at Everyday Loans
Andrew Wayland is a financial marketing expert and helped set up Everyday Loans back in 2006. Prior to his position as Head of Marketing for Everyday Loans he worked as the Head of Commercial Development for a tech start up and ran his own PR agency for around 5 years. LinkedIn: https://www.linkedin.com/in/andrew-wayland-9018074