If you are, or soon will be contributing to a workplace pension, you’re joining the 90% of eligible employees choosing to do the same. Congratulations, you’re in good company!
But what is a workplace pension when it’s at home?
Your workplace pension
A pension is a bit like a savings account, but you won’t be able to access the money until you’re at least 55. A few years ago, the government made a rule that all workplaces needed to add their eligible employees to a pension scheme, to help everyone save for the future. Your employer has chosen a pension provider who will manage your pension pot for you and does all the work to get your account set up.
Money is added to your pension pot when you get paid, in the form of pension contributions. The great news is that you also get free money that’s added to the pot: free money from your employer and free money from the government. All of this helps grow your pension pot to help you prepare for the future.
What happens to your money?
Your pension provider will invest that money so it grows over time. In fact, pension investments do pretty well. £1000 invested into a pension fund 35 years ago would be worth three and a half times as much today than if the money had been used to buy property.
When you get to 55, you’ll be able to access some of your money if you need to. You won’t be able to use your whole pot until you reach official retirement age, which is currently late 60s. The money in your pension pot will be used to cover your expenses when you want to stop working. With the average person aged 65 today having a 1 in 10 chance of making it to 100, you’ll probably need enough money to last decades.
Maji: making the most of your pension
Compound interest is a beautiful thing! Of course, the earlier you start contributing into your pension, the more money you’ll have when you retire. So, you’re already on the path to a bright financial future just by taking part in your to your workplace scheme. But there are some simple steps you can take today that can make a huge difference to the size of your pot in the future.
Luckily, with a Maji account, we’ll break these steps down into bite sized, simple actions that will make a difference to you straight away. Plus, you can easily keep track of your pot to watch your money grow over time and see how much you need to put into your pension to reach particular goals. With loads of resources to help you understand your finances, we’re here to help you every step of the way.
The final bit of good news? Your Maji account is yours for life. We’ll be your permanent companion helping you plan and achieve the older age you want.
Photo by Brooke Cagle on Unsplash