When should I start a pension?

Pension regrets, we’ve had a few, but it’s never too late to think about the income you will need during retirement. Deciding what you want from life will help you make those decisions…

Saving and investing for the future has always been important. Most of us realise this but often fail to act. Many of us leave it too late to plan and organise the pension we will need when we are older.

Clients often tell Logic Wealth Planning that they wish their financial matters had been put in order earlier. Not earning enough during early careers, having family expenses and preferring to take exotic holidays are all given as reasons that longer-term money considerations are often put off.

One thing is certain; burying your head in the sand and hoping you can forget about planning a comfortable future income is not an option.

An ever-changing society

The way we live and work has changed beyond all recognition over the last few decades. Many people now live and work longer, most have access to credit and mortgage products, and it’s never been easier to hop on an aeroplane and travel the world.

What has that got to do with thinking about the future?

Put simply, it means that how and when we all plan our incomes to cover our later life has also changed. We convince ourselves that we’re hectic and always busy. Making key decisions are often put off and left for that mystical rainy day.

Unfortunately, that day never seems to come. There’s always something else to deflect plans, and thoughts about putting personal (and wider family) financial matters in order are quickly forgotten.

Pensions aren’t what they used to be!

True, in some cases. Pension products have changed and the way we contribute to them has certainly shifted. Some company pensions, like final salary or defined benefit pensions, have been closed to new members.

What some organisations contribute to your pension has also changed, while others are struggling to keep older funds running.

You shouldn’t rely on others where your financial future is at stake. It’s a complicated area and personal to you, so understanding your options and getting good advice is more important than ever. We always believe in posing the 24-hour question (read more HERE), where we ask you to consider what you’d like to achieve, how and when.

Then, with a clearer view of what you’ll need in later life, you can start considering how you can get there. We love being part of that process.

How should I use my pension?

Unless you have reached pensionable age, you can’t spend any of your pension just yet. However, planning how you will draw an income, and whether you will make efficient use of a tax free lump sum are things you should think about as early as possible.

For example, when do you think you will finish work? Just saying 60 or 65 years of age is no longer the easy answer. We are all living longer, and staying fit and active is proven to improve our quality of life. So there’s a good chance you’ll work on, maybe into your early 70s.

Let’s not forget the skills gap. Your employer might want you to carry on, even offering incentives to encourage you to stay. Your personal pride should also be factor. You might take great pleasure helping to pass on skills, while still earning a good salary.

What this means is that you might not need to start receiving your pension as early as you think. If your mortgage is paid, you have a car that you are happy with, and your income (whether that’s still full-time or just a few casual hours) might cover the holidays you enjoy taking.

So do you need to take a lump sum as soon as you are eligible? There might be better ways to invest that growing pot of money, especially if you started your fund later in life.

Relaxed retirement, not regrets…

Don’t be one of those people who regret not acting sooner. It’s never too early to start thinking about your pension. Do something NOW. Start those plans. Come and talk to Logic Wealth Planning about the options available to you.

It’s easy to think of retirement and wealth planning as something that belongs in the future. Don’t be fooled. Starting the process early will pay huge dividends in the long run. Then you’ll be able to realise some of those things you probably talk about when answering our 24-hour question.

We’re an easy bunch to get on with. Start the conversation with a quick call now: 0808 1234 321