It’s never too early to start a pension!
The focus on saving for retirement has gathered pace over the last decade or so as we realise that the state pension entitlement on its own is wholly inadequate. With the advent of auto enrolment for employers in making provision for their workforce, the government has tried to lessen the burden on the UK’s finances by placing more responsibility clearly in the private sector. With this said, making provision early for an individual can make a tremendous difference to that individual’s standard of living when they do retire.
Whilst most people are aware of pensions, they don’t always realise that their children can have their own pension provision from birth.
It is possible to pay a maximum of £3,600 gross per annum, which actually costs £2,880 before basic rate tax is added, for the child with contributions from parents or even grandparents over the years. This can be paid either as a lump sum or a regular contribution and even at quite modest growth rates, could go a long way to meeting an individual’s income requirements when they eventually retire.
We don’t know how our children will manage their financial affairs during their lifetime but making provision for them now for when they retire could be one of the most important legacies that we can provide. If you would like to review the options available to you both for your provision and for that of your children or grandchildren please do not hesitate to contact Lee Hayward at Kreston Reeves Financial Planning here or on +44 (0)330 124 1399.
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